A third of us have carried expensive credit card debt for ten years

50 years of credit cards have brought us a decade of debts

credit cards stack on white

Should we be celebrating or bemoaning the 50th anniversary of the credit card? On the one hand, it has transformed an archaic system, and brought incredible freedom and flexibility to our spending. However, on the other hand, it has plunged millions of people into debt. A new study has shown just how serious these debts are.

Money Supermarket analysis found a that 70% of UK adults currently own a credit card, with 35% having more than one. At the moment, three fifths of us currently owe money on a card - with an average outstanding balance of £891. This increases to an average of £1,215 for those aged between 18 and 34.

This doesn't have to be worrying, because when we're on top of our debts, it can be a sensible way to spread the cost of purchases - assuming we're not paying a punishing interest rate. Unfortunately, other statistics from the study would seem to indicate that this isn't what's going on.

Holding debt for years

On average, this debt has been sitting there for over two years (27 months), rising to 37 months among 35 to 54 year olds.

Almost two fifths of card holders don't manage to clear their balance in full at the end of each month - and 26% of them have never managed to pay their card off in full. Some 8% only ever pay off the minimum required - and another 2% fall short of the minimum some months too. Shockingly over a third of people (37%) have carried credit card debt for ten years or more.

What can we do?

Carrying this sort of debt can be outlandishly expensive, so it's essential that we don't let this continue. All credit card holders should take stock of their situation, and take action.

Fortunately the credit card landscape has changed, and the balance transfer card providers have waged a battle of the interest free period. The zero per cent interest duration has increased from just 12 months in 2006 to as long as 40 months today. Furthermore, providers have recently been slashing their balance transfer fees too.

This means you can make huge inroads into your debts with three simple moves.

1) Start with the cause

It's pointless tackling your debts unless you understand how you got them in the first place - so you don't fall into the same trap again.

If you had a one-off expense that you are trying to pay back, then once you have paid the card off, you should put money aside in an emergency fund - which you can dip into next time instead of borrowing again.

If your debts are the result of a gradual overspend, you need to seriously examine your outgoings and your income, so you can balance your budget. The degree of change required to make ends meet will depend just how much you are overspending by.

2) Assess your total debt, and a realistic timescale for paying it off

If you can tackle it within a few years, switch to a 0% balance transfer card, and instead of paying a fortune in interest each month, pay the debt down. You should work out how much you need to repay in order to be back to zero by the time the deal runs out. Then go back to your budget and make sure you have created enough wiggle room to make these payments.

If repayment will take longer, you can consider a long-term lower rate, which will reduce your interest payments - without punishing you for not having paid off your debts by the end of the introductory period.

3) Stick to the plan

Once you have a roadmap to repayment, don't let your spending get out of control and repayments go by the wayside. You also need to avoid spending on your new card and building up more debt. If you think you will be tempted, destroy the card.

You may have some hard work ahead of you in paying down your debts, but it's the only way to shake off another decade of debt, and find something far more exciting to spend your money on than credit card interest payments.

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