As interest rates increase, more and more people are looking to their credit cards to support them during times of financial difficulty.
However, credit card consumers are discovering that debt breeds debt as they struggle to meet repayments. In the first half of this year, over 4 million repayments were missed, resulting in penalty charges that exceeded 50,000,000.
The consequences of these missed payments are more far-reaching than some realise, with consumer credit ratings being affected negatively for up to three years. In turn, these consumers then find it harder to borrow or take loans and can pay much higher rates of interest, as creditors view them as high-risk borrowers.
Unfortunately this system, which was designed to offer the consumer a way in which to support their lifestyles beyond their immediate means, can, if not carefully managed, have directly the opposite effect. Many of those unable to meet repayments and penalty charges are now faced with a spiral of debt with no obvious escape route.
However there are those who use remortgaging as a tool by which to free themselves from debt, consolidate all monthly payments, and also reverse...
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