Redundancies can lead to credit card debts

By Sarah Engle, Wed 9 Nov 2011 - Published in Credit Cards

The number of people who have been affected by redundancy, particularly in the past year, could mean a sharp rise in the number of borrowers who cannot afford to pay off the debts on their credit cards.

This warning came from the Consumer Credit Counselling Service (CCCS) on the same day the government released figures outlining why people left their last job. The survey found that, of the people leaving a job in 2011, 43 per cent have done so because of redundancy.

CCCS reports say that a quarter of the people they gave financial advice to last year had gotten into debt because they could not afford to pay off credit cards after being made redundant.

The CCCS director of external affairs Delroy Corinaldi said: "Redundancy is a huge financial blow for those affected. While many will find new jobs, large numbers will not or will have a gap before they do. This will leave them struggling with credit commitments.

MoneySupermarket.com recently found that 11 per cent of Brits will turn to a credit card to fund Christmas.

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