Affordable credit 'not the answer to debt'

Affordable credit cards will not help resolve debt in the UK, an expert has said.

Consumers struggling financially in the aftermath of the recession will not benefit in the long-term from the introduction of more affordable credit cards and personal loans.

That is according to Jonathan Davis, economist and managing director of Jonathan Davis Wealth Management, who has called on the government to take action to reduce the cost of essential outgoings such as gas and electric bills.

These comments came after the publication of a report by Consumer Focus earlier this week (September 3rd), which estimated household debt in the UK will soon rise to around £2.1 trillion.

With this in mind, the group insisted more needs to be done to make borrowing more cost-effective for those finding it tough to make ends meet.

However, Mr Davis has dismissed this idea on the grounds that "the solution to household problems is not more debt, whether it is low cost or high cost" and instead urged the coalition to focus on providing a "lower cost of living".

By Joe Letts