Credit Card Debt
Research indicates UK consumers are being offered more so-called ‘cheaper’ credit cards than before the economic downturn began in 2007. Unfortunately, this will be a particularly difficult challenge for many UK households, at this time of uncertainty over UK redundancies. In fact, the Bank of England has released figures recently indicating credit cards are generally one of the less likely debts to be repaid. Credit card debt reduction may simply become a low priority should your circumstances change. Additionally, even long before any such problems many UK consumers opt for the minimum monthly card repayments. If this sounds like you, or you have any other circumstances meaning you’d like credit card debt help, Debt Options have a number of ways of assist you.
Why do people look for credit card debt help?
1. They may have been lured in by glossy advertising. Many cards are advertised with ‘zero rates’ but only when certain conditions are met - the real rates can be extremely high.
2. They may be struggling to meet repayments due to unexpected circumstances - like a sudden redundancy.
3. They may be struggling to meet repayments when introductory card interest rate offers expire.
4. Balance transfer offers may not have actually delivered the promised ‘zero interest’ at all.
Some Popular Legally Recognised Options
There are some informal options such as a Debt Management Plan. In the case of credit card debt reduction, it would propose a proportion of the debt is repaid (for example, 70%), over a fixed time period in agreed monthly instalments. A Debt Management Plan could not apply to all cases though, for example, where credit card companies interpret it as a sign that you are in financial trouble and are looking for a more formal solution, or typically when there are 3 or more creditors involved. An IVA is a popular formal option for credit card debt reduction as it has a number of very compatible features:
1. It stops creditors demands for repayment - credit card companies have been known to be persistent in chasing overdue payments despite the industry’s own Lending Code guidelines.
2. It stops fresh court action - including credit card companies petitioning for your bankruptcy - and all new interest and charges.
3. It is typically used for those who owe a combined total of £15k or more to 3 or more creditors - so it can be useful for those who have multiple arrears from juggling payments to whichever companies have simply applied the most pressure. Instead, the licensed Insolvency Practitioner supervising the IVA deals with creditors by apportioning funds in a recognised order.
4. Every month, an properly arranged IVA creates a manageable repayment plan, in direct contrast to unmanageable and escalating credit card bills every month.
5. It crucially writes off all the debts it covered on successful completion, typically after 5 years.
Whatever your situation, contact Debt Options to get professional advice on legal methods of credit card debt reduction. Since Debt Options are not funded by and not linked to any lender (such as a credit card company), we offer independent advice on which form of credit card debt help is genuinely in your best interests.
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