The number of consumers struggling with overdraft debt is on the rise, as credit card and personal loan providers impose tighter criteria for lending, according to a leading debt advice charity.
The Consumer Credit Counselling Service (CCCS) has revealed that it has seen a ‘marked decline’ in the number of those reporting problems with credit card debt, while a greater number of people sought out support for tackling overdraft debt.
The CCCS said 70,000 enquiries relating to overdraft debt had been made in the first half of the year, meaning that the total for 2012 is likely to be the highest since the start of economic crisis.
The increase in overdraft debt was partly attributed to the fact that consumers have had to turn to overdrafts to stay afloat, amid tougher lending conditions.
The average debt owed on credit cards has risen from around £1,700 five years to a current figure of just over £2,000.
Consumers aged between 41 and 59 have seen the largest increase in overdraft debt since 2007, with this figure rising by £407 to an average of £2,345.
“People tend to view what they owe on their overdrafts differently to other types of debt such as credit card or personal loan,” said Delroy Corinaldi, CCCS external affairs director.
“It is not unusual for those contacting the charity for help to not calculate what they owe on their overdraft as part of their overall debt. The problem with this is that it makes it easier for them to use their overdraft for day to day expenses, temporarily masking any problems they may be having with making ends meet.”