Students warned about credit card debt

Banks should take action to help avoid young Britons become over-indebted before they even start to work, according to one industry observer.

James Falla, managing director of debt consultancy Thomas Charles, said that British students have access to extensive overdrafts and credit cards while still at university.

The result is that graduates start their careers owing between £9,000 and £12,000 on their student loan, with an average overdraft of £2,000 and credit card debt of £2,000 to £3,000 on top of that, he said.

“When you’re at university, you take the view that everything is going to be okay,” Mr Falla commented, adding that this is “an attitude thing”.

He said students often spend as they believe they will have lots of disposable income once they start work, but when reality strikes they find that this is frequently not the case.

Mr Falla added: “Suddenly, people are actually borrowing more before they even start.”

“I think the banks themselves have to take some responsibility,” he concluded.

Thomas Charles research out this week revealed that 8.2 million adults are in debt, with 2.1 million admitting they frequently struggle to meet their debt repayments.

Last month, Mark Cockburn, Lloyds TSB Scotland retail network director, noted that levels of student debt are higher than ever before.

He advised them to carefully consider all their financial options and use “savvy budgeting skills” to plan ahead for expenses and manage their cash and credit cards effectively.

© Adfero Ltd

Leave a Reply

Your email address will not be published. Required fields are marked *