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Consumers' increasing use of credit cards could lead to an escalation in debt problems in the UK, it has been warned.
According to the Barclaycard Spending Index, the amount spent on credit cards in August was 9.2% higher than that spent a year earlier, making it four months in a row that credit card spending has increased.
Although increased spending on the high street is a positive sign that consumer confidence in the economy is returning, John Fairhurst, managing director of Playplan, fears that some people might be getting a little ahead of themselves.
"We would be the last to pour cold water on a high street spending recovery but as a responsible advisor, we warn people to be realistic about their finances, the wider economy, and the possible impact this may have in the coming months," he added.The findings of the Government's comprehensive spending review are set to be revealed next week, with cuts in the public sector set to directly impact on more than one in five of the UK population who are currently employed in the sector.
Many more employed in jobs linked to local authority work could also be indirectly affected. Meanwhile, with Christmas fast approaching, the inevitable festive spend could increase credit card spending even further.
"We give the same free advice as the Citizens Advice Bureau and National Debtline – use credit cards wisely when there is money in the account to cover the spend," adds John Fairhurst.
If you think you are overspending and have credit card debts, or any other debts, you are struggling to repay, then help is at hand. Debt advice specialists such as Payplan and Debt Free Direct will offer free and impartial advice to those with debt problems. Helpful information can also be found in Debt Free Direct's Debt Advice Guide, Debt Management Plan Guide and IVA Guide, which can all be downloaded for free.
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