One in three could face Christmas debt hangover in 2012

By UK CreditCards.com

Almost a third of Britons will go into debt this Christmas, according to new research from Intelligent Environments.

debt-hardship

The banking software company commissioned a survey of consumers which revealed that many will rely on credit cards, overdrafts and family members to get them through the festive period.

The poll also suggests that young people are having the hardest time managing their finances and that many would welcome more assistance in the form of email or mobile alerts.

31% to go into debt
The survey of 2,015 adults, which was conducted by YouGov on behalf of Intelligent Environments, revealed that 31% of Britons will go into some form of debt during the festive period.

Among this group, 58% said they would spend more than usual on their credit cards in order to pay for presents and entertainment, while 39% expect to go into their bank overdraft. A further 11% will borrow money from family and friends, with 6% relying on personal loans.

YouGov's poll also found that young people are finding it particularly difficult to manage their money. Nearly two-thirds (64%) of 25 to 34-year-old respondents said they were facing debts or arrears, while 26% of participants admitted they go into their overdraft at least once per month.

"Christmas is typically a cash-strapped time of the year, but as harsher economic conditions start to bite, the number of people falling into debt or behind on their payments looks set to rise," said Jerry Mulle, sales and marketing director at Intelligent Environments. "Financial institutions therefore have a duty to help customers better manage their finances and make it easier for them to repay their debts."

Online and mobile alerts could help
One way that Mr Mulle believes banks can help customers is by alerting them via text message or email when they are at risk of going overdrawn or have missed a credit card repayment. This is supported by the one in four survey participants who thought online and mobile alerts would help them to avoid slipping into debt.

"As the uptake of smartphones and tablets continues to grow, interactions across digital platforms have become the norm," Mr Mulle observed. "As a result, online and mobile channels are becoming increasingly relevant to consumers struggling with debt by providing them with the convenience and privacy they desire to manage their arrears."

See related: 6 tips for holiday shoppers; Study: Nearly half of Brits haven't saved for the holidays

Published: 13 December 2011