3,000 face mountain of debt after Christmas, charity warns
Up to 3,000 people are expected to be in financial difficulty after Christmas, it has been warned.
Citizens Advice predicted that thousands finding themselves in financial difficulty would seek out its help within the first two months of next year.
The claim came as new figures showed that for almost a third of us, the cost of good cheer is to some extent carried by debt.
Approximately one in five puts the expense of buying gifts on their credit card and one in 10 relies on their overdraft.
Kathy McKenna, project manager of Citizens Advice' free debt service, said that while a third pays off the debt within a month, one in seven takes up to three months and one in 50 takes a year or longer to clear the cost.
"We are forecasting that 3,000 people will contact Citizens Advice in Northern Ireland for help with debt during January and February, which is our busiest time," she explained.
"Those coming to see us are not, however, just presenting with debt accrued over the festive season.
"The additional spending will have pushed budgets to breaking point when they finally take stock of their finances."
Citizens Advice is raising awareness of debt, budgeting and responsible spending by sharing tips over social media in the run-up to Christmas Day.
Ms McKenna said there were many people struggling to balance the books.
"At Citizens Advice Northern Ireland, we help with 2,000 debt issues every month - credit cards, store cards, personal loans, mortgage debt and rent arrears to name a few," she added.
According to the Nationwide Building society's recent Christmas spending report, people on average spend roughly half their monthly pay on Christmas, while one in three pay for the cost of the festive season using a credit card or overdraft.
Unmanageable debt has been shown to be related to financial exclusion, family breakdown and poor physical and mental health.
Those in the lowest income group are three-and-a-half times more likely than the highest earning fifth of the population to have debt worth more than six months of their income.
Citizens Advice has shared the following advice:
- Spend time shopping around, researching what's on offer;
- Always look at the total amount you will have to repay when borrowing money. A shorter repayment period may be better than a slightly lower Annual Percentage Rate amount;
- Make sure you know the difference between secured and unsecured loans. A secured loan means you can lose your home if you don't keep up repayments;
- Be careful about borrowing more money to pay off any existing debts;
- Be really careful about signing up to interest-free deals. They're only interest-free if you pay them off within a certain time period;
- Watch out for the offer of a 'payment holiday' on credit card and loan agreements.
Citizens Advice offers a free debt advice service to the public. Contact the free phone debt advice helpline 0800 028 1881