Recent research indicated that UK consumers are being offered even more so-called ‘cheaper’ credit cards than in 2007 before the economic downturn began in earnest. Yet there are many UK households who will find this situation very challenging, not least due to uncertain times as far as UK job losses are concerned. The Bank of England recently released figures which indicated credit cards are one type of debt which is less likely to be repaid. Credit card debt reduction may simply be a lower priority when someone’s circumstances suddenly change. It’s also the true that even without any such problems materialising yet, a substantial number of UK consumers are opting to pay only the minimum amount each month towards credit card debts. If you recognise yourself so far, or are interested in credit card debt help for any other reason, this article gives you some of the reasons why people look for help and some of the legal routes to end to unmanageable card debts.

Common Reasons For Needing Credit Card Debt Help

• People may have been tempted by slick advertising campaigns. Cards are sometimes advertised with ‘zero rates’ with the conditions in the ‘small print’ - the real rates for many people can be extremely high

• People may struggle to find the repayments on time because their circumstances change without warning - for example, suddenly losing their job

• People may struggle to find the repayments after the introductory card interest rate offer has expired

• Balance transfer offers sometimes haven’t actually delivered the promised ‘zero interest’

Commonly Used Legal Options To End The Debts

These broadly divide up into informal and formal solutions. Informal solutions include a Debt Management Plan - when used for credit card debt reduction, it would mean a proposal that a proportion of the debt was repaid (for example, 70%), in agreed monthly instalments over a fixed time period. This solution cannot be used in every case though, - there may be times for example, when a credit card company interprets this move as a sign that you are in financial trouble. They may feel things need to move to a more formal solution, for example, when 3 or more creditors are owed money that is overdue. An IVA is one very popular formal option for credit card debt reduction, as many of its features suit the situation very well:

• It will stop all creditors demands for repayment - credit card companies are known to have been persistent in trying to collect late payments despite the industry’s own Lending Code guidelines

• It will stop any new court action - and this includes credit card companies entering a petition to the courts demanding your bankruptcy - plus it puts a stop to all fresh interest and charges

• It is more commonly used for consumers owing a combined total of £15k or more, which is owed to 3 or more creditors. This makes it useful for people with multiple arrears as a result of juggling payments to whichever companies had been simply applying the most pressure. Under an IVA, the licensed Insolvency Practitioner appointed to supervise everything will deal with creditors by apportioning funds in a recognised order

• If it is properly arranged, an IVA creates a manageable repayment plan with an agreed monthly amount, instead of trying to deal with escalating credit card bills each month

• One vital aspect its that it writes off all the debts it covered if it is successfully completed, typically after around 5 years or so

The better credit card debt help companies are not are not funded by and not linked to any lender (such as a credit card company), and should be able to advise you on which is the best option rather than steer you into credit card debt reduction plans that don’t really suit you.