Summertime blues won't give you any holidays from debt

SUMMER can be one of the most expensive seasons for Scots, with holidays and weddings becoming more of a drain on finances than ever before.

This makes budgeting vital at this time of year and being willing to compromise on holiday or how much you spend attending weddings.

Scottish workers desperate for a summer break at any cost are at serious risk of getting themselves into debt they can't repay, warns consumer debt solutions firm Newtomorrow.

Around 12 million people in the UK admit to taking out additional credit-card debt and loans to pay for a break, with another 6 per cent getting themselves further into the red while on holiday.

With personal debt now growing by £1 million every four minutes, John Hall, chief executive of Newtomorrow, said people with outstanding debt who paid for holidays on credit are digging themselves deeper into a hole.

Hall said: "A lot of people see summer holidays abroad as an absolute necessity which they can't go without and even if they can't afford to pay for it they'll take on more debt just so they can get away.

"The problem with this approach is that, very often, the people who'll pay for their 2007 holiday using credit did the same last year and, by taking on more credit to pay for this year's holiday, they're adding debt on top of more debt."

More than ever, people simply pay off interest with their monthly repayments, so the original amounts borrowed are undiminished month-to-month.

And without an adjustment in spending behaviours, Hall said, the majority of this debt will never be repaid.

He added: "The more people pretend that debt is not a problem for them and continue to do things like pay for summer holidays with credit cards and loans, the worse things will get.

"Eventually what will happen is they'll miss payments and will suddenly find they have a lot of creditors looking for money they have no hope of paying back."

Newtomorrow offers customers in financial difficulties a way out without the need for additional borrowing.

In certain cases, ITS licensed insolvency practitioners may use a scheme known as a Protected Trust Deed to negotiate an element of debt write-off with creditors, leaving the individual debt-free in three years.

Hall explained: "People have to know that taking on debt to cover more debt isn't going to solve their financial problems in the long term - most of the time the opposite is true."

And with the average cost of attending a wedding now estimated to be £386, many people would be wise to choose between this or going on holiday.

Research published today by CreditExpert.co.uk, just as the wedding season gets into full swing, reveals £130 of this amount is often spent before the wedding itself on stag and hen parties.

In keeping with reputation, nobody can compete with "thirsty Scots" when it comes to buying drinks. More than one in 20 (6 per cent) claims to have spent between £100 and £200 on alcohol alone at the last wedding they attended.

"Weddings are a time to celebrate but it's clear that people are increasing their financial stress and spending money they don't have simply in order to be there," said Jim Hodgkins, managing director of CreditExpert, the credit monitoring and identity fraud protection service from Experian.

"The cost of getting married and attending other people's weddings is often underestimated, but it's a significant outlay that often hits hardest those who are first-time property buyers or those still burdened by student debt. As a result, attending lots of weddings in a short space of time can mean your credit rating is adversely affected."