These UK Cities Could Struggle When Repaying Debt Acquired Over Christmas
04 Jan 2020
Approx Reading time: 2 minutes
- Millions of people in the UK are carrying forward debt acquired to fund the Christmas holidays.
- People in some regions, especially in parts of Scotland, are especially vulnerable to struggling with their outstanding Christmas debt.
- Many people plan to use their credit cards to finance their outstanding debt.
Christmas is always the most wonderful time of the year, but it is also a very expensive one. In fact, many people, especially in Britain, end up taking on a lot of debt over the holidays to pay for expenses.
And now it seems like there are many people in the country who are struggling to repay their Christmas debt. An analysis conducted by ClearScore, which used data of over 8 million of its users, revealed that there were some areas in the UK that were especially at risk of not being able to service their Christmas debt.
The top three places on this list are Motherwell, Kilmarnock, and Kirkcaldy, all located in Scotland. Next on the list is Durham, followed by Darlington. At the other end of the spectrum, it was revealed that the least at-risk areas were the Isle of Man as well as Jersey.
A survey conducted with Christmas debt borrowers revealed that 7% planned on servicing their debt by acquiring a new credit card in the month of January, while 15% already had credit cards for an average period of five years and planned on using it to make repayments.
However, considering the fact that not all credit cards carry the same interest charges, using the wrong card can put some people in a very difficult financial position. If we consider the average cost of the holidays to be £3,600 and assume that customers would continue to pay the minimum due payment on their credit card, charges of an additional £620 would be incurred on average. This can go as high as £1,403 in case customers opt to pay through credit cards that carry the most interest rate.
That is why, according to ClearScore, it is of paramount importance that credit card buyers pay more attention and spend more time analyzing different credit card options before settling for the best one. Online checkers can be especially useful in making this decision as they can offer tailor-made recommendations based upon personal credit scores and financial situation.
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Also, at the time of repayment, ClearScore recommends paying off the debt with the highest interest rate first to minimize the interest paid on the total outstanding debt.