How do people get into debt? The most common causes and how you can avoid them

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Debt is a serious issue in the UK – many of us have credit cards or mortgages, but the ability to make repayments can quickly spiral out of control. So how do people get into serious debt and how can you avoid it in the future?


Credit cards

Credit card spending is considered to be one of the main causes of debt. Credit cards are usually there for emergencies, if you don’t have a savings buffer – say the washing machine breaks down or you need to pay for car repairs – but if you don’t have the means to pay back what you have spent at the end of the month then you could find yourself in debt.


A common reason for repayment issues is either simply spending more than you can afford to repay or the interest rate significantly increasing the amount owed. Reduce this risk by only taking out 0% credit cards and ensure you keep a close eye on when interest will be added. Strive to make your repayments before this is introduced. Alternatively, only use your credit card for small purchases that you can clear every month, such as petrol or food shops. This will not only improve your credit rating but also ensure you avoid large debts.


Overdraft repayments

Overdrafts can feel like an ideal solution when we fall short on money and it can be tempting to dip into the red if you know you are being paid relatively soon, however it’s important to remember an overdraft is still borrowed money and failure to pay back what you owe can lead to further interest and charges. Being aware of what’s in your bank account is one of the easiest ways of reducing the likelihood of slipping into your overdraft, simply keep check regularly what is left in there and cut expenses as and when needed.



Redundancy can strike at any time in our lives and leave us with serious financial issues, as our regular income is cut off. While we can never fully prepare for such a situation, ensuring our finances are in order is a good place to start. Setting up a strict monthly budget and paying a little into a savings account each month can help provide some funds to fall back on.



Divorce is another cause of debt that cannot be accounted for. The legal fees can quickly see people heading into financial difficulty and, if they leave the partnership without much to show for it, this can cause even more damage to their bank account. Seeking out a solicitor who charges reasonable fees and confirming what bills and costs you are accountable for between you and your ex-spouse is important to reduce the financial burden a divorce brings.


If you are struggling with debt, it’s important you seek expert advice. A debt management company will be able to provide help and advice on a wide range of solutions such as Debt Management Plans (DMPs) and Individual Voluntary Arrangements (IVAs).


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