Over the past year or two many people have fallen into debt, with many accruing higher debt levels through no real fault of their own. In the past we used to borrow on loans and credit cards to pay for luxuries such as new cars and holidays. However, over the past couple of years this has changed, and people have started to take out loans and use credit cards to pay for every day purchases and essentials rather than just for luxuries and one off purchases.

The higher cost of living compared with the lack of increase in salaries means that people are now finding it more and more difficult to cope financially and make ends meet. Petrol and food prices have soared, the cost of vehicle insurance has rocketed, and many other basic living costs have risen, but wages have only increased slightly, been frozen, and for some people have even fallen.

The temptation to start relying on loans, credit cards, and other form of unsecured credit has increased amongst those that are struggling to afford the things that they used to be able to afford. This has led to more and more people turning to finance and credit for things that they normally wouldn’t have put on credit, and is of course contributing to an increased level of debts amongst households.

In fact, a recent survey was carried out by Scottish Provident showing that these days Brits have to be over £15,000 in debt in order to start worrying about their debt levels. Furthermore the survey showed that around 11 percent of people that were in debt and were struggling to pay bills and keep up with financial commitments would still be prepared to turn to finance and take out another loan.

With the new year only just starting now is a good time for those with debt to try and avoid getting into any more debt, and instead look at ways of addressing the situation so that they are not paying out more than they can afford each month, and can pay for essentials without having to turn to additional credit. This could means going to a debt advice expert or charity for help in budgeting more effectively, or could mean consolidating existing debt with a cheaper, lower rate consolidation loan, so that you do not owe any more money than you already do but can reduce the amount that you are paying out each month through lower rates and longer repayment periods.