According to a report by Price Waterhouse Coopers unsecured debt was reduced by UK Households in 2011, but still stood at an average of £7,900 per household. The report found that credit card debt had fallen the most with people using Debit Cards and PAYDAY LOANS instead.

The average credit card balance was still around £1,000 even though both the number of cards in circulation and the total amount of credit card debt had fallen. Another phenomenon was the increase in payments by digital methods such as via mobile phones, especially amongst younger customers. Debit card usage also increased by 10%.

There was some good news for Credit Card companies as the amount of debt that they wrote off fell from 2010. The drop in borrowing on credit cards does not appear to be due to consumers heeding debt advice or greater financial sophistication. It seems as if the tightening of credit criteria and lending limits by credit card providers has pushed people into the arms of more expensive payday loan providers.

Ernst and Young described the rise in payday loans as “phenomenal” and predicted that it would continue to grow especially amongst the poorer sections of society.

If you are in debt and find that you do not have enough money to pay bills at the end of each month it might be a better solution to talk to a Debt Advisor. Debt Local can put you in touch with a local debt advisor who can discuss your individual financial situation and offer you a range of options tailored to your circumstances. Often people who take out payday loans spiral into further debt; this might be avoidable if they receive timely payday loan advice.

Debt Local can be contacted through their website www.debtlocal.co.uk or on their FREE phone number 0800 044 5659.