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Last Updated: Thursday, 10 February, 2005, 00:31 GMT
Thursday marks debt 'freedom' day
Credit cards
Spend, spend, spend: Average credit card interest rate is 14.99%
The average person will work for 40 days this year just to clear interest payments on their debts.

Financial adviser firm IFA Promotion has dubbed 10 February - the 41st day of 2005 - "Debt Freedom Day" to highlight debt issues.

The amount we owe from personal loans and credit cards has increased from 38bn in 2000 to 63bn - a rise of 65%.

Yet the good news is that according to IFA's calculations, people are now paying off their debts more quickly.

For this reason, 2005's Debt Freedom Day is five days earlier than last year's.

IFA Promotion based its calculation on an average salary of 22,183 a year. The average interest paid on credit card debts is 14.99% and 12.50% for loans.

It does not include secured debt, such as mortgages.

Debt worry

The number of people with credit card and personal loans debt has risen by 13%, from 8.7 million last year to 9.5 million this year.

As a nation, we need to take control of our finances
David Elms, IFA Promotion

At the same time, the average credit card and personal loan debt has fallen from 3,200 in 2003 to 2,400 in 2004.

"Although Debt Freedom Day is a hypothetical date it illustrates the very real point that, as a nation, we need to take control of our finances," said David Elms of IFA Promotion.

"The simple answer to reducing debt is careful budgeting, looking at our income and outgoings, and how we're managing them."

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