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The UK guide to credit card debt

The UK guide to credit card debt

By: Kate Anderson | May 15, 2020

Credit card debt is one of the most common forms of personal debt. In January 2020, according to The Money Charity, the average credit card debt per household in the UK stood at £2,595. So, if you have outstanding credit card debt and you want to know how to get it under control or whether or not it will affect your credit score, we’re here to help.

Here’s our guide to all things credit card debt in the UK. In it you will find links to a number of our resources on the subject.

Where can I find debt advice?

If you are in a position where your credit card debt is starting to pile up, it can feel scary. Outstanding balances and compound interest mean that your debt problems can quickly spiral and feel unmanageable.

If you are having issues with debt, it’s best to talk to a non-profit debt advisor. You can do this through organisations such as StepChange and Citizens Advice. Here you will receive free one-to-one advice on debt solutions that might fit your needs.

However, if you just want to do a bit more reading around the subject, take a look at our article ‘Debt help in the UK: 5 possible solutions’. Here we give more information on debt counselling services. We also break down the five different debt solutions available here in the UK.

Should I look to consolidate my credit card debt?

One way to bring your credit card debt under control is to consolidate it. If you have multiple credit cards and are struggling to keep up with payments, consolidating them all into one place could make it all more manageable.

The most common way to do this is through a 0% balance transfer credit card. If this option is of interest to you, take a look at our article ‘How to consolidate credit card debt’.

Most 0% balance transfer offers require you to have a ‘good’ credit score. If this is something you don’t have, you may be considering consolidating your debt through a loan. We break down when this could be a good option in our article ‘Is it a good idea to consolidate credit card debt?’.

Does credit card debt affect my credit score?

Having credit card debt can affect your credit score. Credit rating agencies look at how much outstanding debt you have when calculating your score.

Your credit score will often dictate whether you are able to borrow money, as well as how much. It can affect everything from getting a mortgage to taking out a mobile phone contract. Checking your credit score regularly can be the key to keeping your finances healthy.

In our article ‘How to check your credit score for free’, we explore the three main credit reference agencies here in the UK. We also explain how to go about finding out your credit score with them – without having to pay a penny.

How can I pay off my credit card debt?

The likelihood is that whatever your situation is, you will want to pay off your credit card debt if you can. While getting debt advice should be your first step if you feel your debts are getting out of control, looking at what you can do to pay off your debts is also a good move.

In our article ‘5 ways to pay off your credit card debt once and for all’, we cover options that can bring your credit card balance down quicker. We explore steps such as identifying high-interest cards and doubling your payments on them, or using your savings to bring your debt under control. The steps outlined in the article are all orientated towards fast-tracking your repayments, while at the same time reducing the overall interest you will pay.