Secured loans and 'breaking the debt cycle'
29/02/2008Consumers in the UK could be entering into a cycle of debt that in the current economic climate may prove difficult to break, one expert has suggested.
A spokesman for Credit Action has warned this week that as many people are struggling with the expenses of day-to-day living, an increasing number are turning to costly borrowing and that this will eventually take its toll.
Chris Tapp, director of the charitable organisation, said that by opting for expensive forms of borrowing, such as high interest credit cards, can cause difficulties in the future and that this is not advisable for long-term stability.
"As inflation kicks in, people find that more of their take-home salary is taken up paying for day-to-day expenses, so they are forced to use their credit card more than they would have done previously just to get by month to month," he said.
Those struggling with credit card debt can often find that the competitive rate of interest that secured loans provide can offer a simple solution to debt consolidation.
 © Adfero Ltd
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