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Debt predictions for credit card holders

Tue, 03 Jan 2006

Overspending during the festive season might take its toll on credit card holders who are unable to repay their debt, according to an accountancy firm.

Grant Thornton estimates that at least 20,000 Britons will face bankruptcy by the end of March. This figure could rise to 66,000 by the end of the year, the firm predicts.

Excessive spending over Christmas is to blame for almost 30 per cent of the bankruptcies in the first quarter of the year, Grant Thornton said.

Many people will have paid for festive expenses by means of their credit card, said Mike Gerrard, the head of personal insolvency at Grant Thornton.

"A little overspend will not break the bank for most, but for those who are already financially stretched, spending that little bit more during the festivities may represent the last straw, plunging individuals in already precarious financial positions further into debt and quite possibly towards bankruptcy," he added.

Personal debt in Britain totals £1.13 trillion, a fifth of which is attributed to unsecured lending, the Independent reports.

Credit card holders in the UK have two-thirds of all the credit card debt in the EU, the paper adds.

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