BOURNEMOUTH, England, July 26, 2012 /PRNewswire/ --
Spending on loans and overdrafts increased beyond predictions this spring with more and more people turning to payday loans and credit cards to survive the recession
According to statistics from the Bank of England, unsecured consumer lending on loans and overdrafts doubled from £379 million in April to £732 million in May. Domestic economic woes, largely spilling over from the deepening crises in the Eurozone, are forcing consumers to continually rely on loans to ride out the recession. After another month of economic contraction was announced already squeezed consumers are trying to tighten their belts further. But for some the squeeze is just too much; Debt Line helps some 20,000 consumers deal with debt every month, as thousands turn to payday loans as a stopgap between paydays.
However, payday loans are some of the most expensive loans the UK has ever seen. Annual interest rates top out at 4,000%, far higher than unsecured lending on loans, overdrafts and credit cards. However for people with poor credit ratings and no collateral, payday loans are the only option when cash flow dries up.
Credit cards are popular choice for people in employment. In the UK, consumers spend £1,392 billion every day on plastic card purchases. The UK's love affair with credit is far from over.
Debt advice charities have seen a huge increase in the number of people contacting them for help and advice and every four and a half minutes someone is declared bankrupt or insolvent.
Debt Line is on hand to help consumers deal with debt problems, particularly those stemming from payday loans and credit cards. It offers services such as credit card debt consolidation, debt management plan creation and it will deal directly with creditors and collectors on behalf of its clients.
Every month it helps close to 20,000 in trouble clients deal with many forms of debt. It is currently dealing with £224 million worth of debts, equating to an average of £12,000 per Debt Line customer. It does charge a fee for its service, but this information is clear and concise and provided up front, unlike most of the debt companies Debt Line deals with on a daily basis.
SOURCE Debt Line