Defaults on credit card debt 'always come first'

Professional debt help could be needed by people who have found themselves defaulting on their credit card debt.

According to a spokeswoman from Moneyfacts.co.uk, credit card debt is "is always the first out of all debts which a person will default on".

When people are looking for credit in the first place, the representative advised: "Despite there being a slight return to a competitive market, credit cards are still considered a high risk.

"A card may offer a good rate, however, it is important to look long term to make sure you can meet the monthly repayments."

Debt solutions such as a Debt Management Plan (DMP) or an Individual Voluntary Arrangement (IVA) could help people who are struggling with credit card debts.

The latest statistics from Credit Action revealed that total personal debt in the UK stood at £1,457 billion, maintaining the 12-month growth rate of 0.8 per cent.

Kevin Still, director of Atlantic Financial Management, commented: "There is generally a pecking order of which creditor gets paid ahead of another. Retail credit and credit card debts should be towards the bottom of this list when you have serious debt problems.

"However, we often see the syndrome of 'he who shouts loudest' working and mail order companies and credit card issuers are very quick to take action to collect debts often to the detriment of priority creditors like the mortgage provider, your landlord, local authority or energy provider.

"When it is clear that you cannot meet all of your financial commitments then seek debt advice to prepare a proper statement-of-affairs and assess the options available to you."

Posted by Fiona Smith 

Categories; Debt Management and Banking,