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12 million will fund living expenses with credit in January 9 January 2012
James Falla (about the author)

Over 12 million people will spend January 2012 relying on their credit cards simply to fund day-to-day living expenses, according to the fifth annual Post Office Consumer Credit Report.

This figure, which is a two per cent increase on 2011’s data, represents 36 per cent of credit card holders. The report also revealed 42 per cent of credit card holders are expecting to use their cards for grocery shopping.

More than two million people are planning to put more on plastic in January 2012 compared with January 2011, the report found. Thirty eight per cent plan to increase their spending by up to £200.

James Falla, personal debt expert at beatmydebt.com is unsurprised by the findings.

"More often than not people get carried away with Christma festivites in December and spend more than they can afford. This means that they invariably have to turn to their credit cards in January to make ends meet" he said. 

Ten per cent of those using their credit card in January said they will need to pay off outstanding Christmas costs and debts, while seven per cent said they will need to use their credit card in January to pay their domestic bills.

Overstretched due to debts

The report highlighted that 21 per cent said they will need to budget more carefully throughout 2012 in order to pay off their credit cards, with an additional six per cent anticipating they will be seriously over stretched due to their debts.

James Falla said that the majority of people would be able to budget successfully however those who are worried about not being able to pay their debt should get fee advice and consider a debt management solution.

"If you know that you will struggle to repay your debt and are having to use additional credit to pay for your living expenses then you have a debt problem and you need to get prefessional advice" Falla advised.

"Debt advice is freely available from almost all debt management companies. However you should do your research about the solutions available on the internet and then speak to a couple of different companies and weigh up the advice you get. If you are considering a debt management plan, individual voluntary arrangement or even bankrupty you should compare the fees you will be charged and go with the company you feel most comfortable with" he added. 

Source: Yorkshire Post