NEARLY one in five people have amassed debts of more than £10,000 on credit cards, loans, overdrafts and hire purchase agreements, a survey has shown.
An estimated eight million people have unsecured debts of more than £10,000, with nearly a quarter owing six figure sums, according to debt solutions firm Thomas Charles.
Among people who owed at least £10,000, 78 per cent had outstanding debts on credit and store cards, with more than half of people having at least three cards, while 3 per cent admitted to having more than 10.
Owing
Just over a fifth of people said they owed between £5,000 and £10,000 on their plastic, with 12 per cent owing between £10,000 and £15,000 and 21 per cent more than £15,000.
A third of people with credit card debt said they regularly applied for new cards to take advantage of low introductory interest rates, and 18 per cent said they only paid off the minimum amount on their cards each month.
Two-thirds of people who owed more than £10,000 had a personal loan, 57 per cent of whom owed at least £10,000 on them.
Loan
Most people had only one loan, but 19 per cent of divorced people and 25 per cent of people with unsecured debts of more than £30,000 had three or more.
One in four people also had a student loan, rising to 82 per cent among the under 25s, on which they owed an average of £10,000.
Just 16 per cent of people with five figure debts had a hire purchase agreement, while 45 per cent had an overdraft through which they were an average of £1,850 in the red.
Unsecured
People expected it to take them an average of six years to repay their unsecured debts, although 13 per cent expected it to be at least 10 years before they cleared them.
At the same time 16 per cent of people expected to go further into debt in the near future, around 33 per cent of whom thought they would build up further bills on their credit card, while 27 per cent expected to take out a loan and 23 per cent thought they would increase their overdraft.
James Falla, director of Thomas Charles, said: "Compared to even just a few years ago, we can see the enormous uptake of unsecured debt across all areas: credit cards, personal loans, student loans.
"This puts literally millions on the borderline. If interest rates rise or unemployment goes up, or if individuals suffer an illness or loss of income, their debts can quickly spiral out of control."
Source: Manchester Evening News - Manchester,England,UK
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