Festive spending and inflation "squeeze" finances

Constantly paying off last year`s debts, along with the current levels of inflation, is causing many people to consider debt management schemes to sort their finances out, an expert has suggested.

A small "jump" in the rate at which consumers across the UK were borrowing money just before Christmas may "squeeze" personal budgets throughout the coming year, according to Credit Action.

Figures from the charity reveal there is likely to be more than 100 million credit cards in the UK as many people rack up debt problems.

Chris Tapp, Credit Action director, said: "As inflation kicks in, people find that more of their take-home salary is taken up paying for day to day expenses, so they are forced to use their credit card more than they would have done previously just to get by month to month."