The summer months are a common time for household spending to rise. Flights, accommodation, car hire, days out and eating away from home all add up. For many people, some of that spending goes on credit, and the repayments arrive once the holiday is over.
This update sets out what to be aware of, the risks worth keeping in mind, and where to turn if repayments become difficult.
What tends to happen with debt over summer
Summer is a well-documented pressure point for household finances in the UK. A few patterns come up repeatedly:
- Buy-now-pay-later (BNPL) use rises. BNPL services are widely used to spread the cost of travel essentials, clothing and activities. The FCA has confirmed that BNPL providers operating in the UK will be brought into regulation, with a target implementation date that is subject to final confirmation by the FCA (see fca.org.uk for the latest position). New consumer protections are expected once regulation takes effect, but the debt still has to be repaid.
- Credit card balances increase. Paying for holidays by credit card is common. If the balance is not cleared each month, interest builds quickly. The representative APR on many credit cards sits well above 20%.
- Short-term and high-cost loans are a risk. Some people turn to payday-style or high-cost short-term credit to cover a shortfall before or after a holiday. The total cost of these products can be significantly higher than the amount borrowed.
- Overdrafts deepen. Arranged overdraft charges vary by bank. Using an unarranged overdraft, even briefly, can trigger fees that make the original gap harder to close.
None of this is unusual. The risk is when the debt is larger than expected and the repayments compete with regular essential outgoings.
Why this matters
Debt taken on for a holiday is unsecured in most cases, which means it does not put a home or vehicle at risk directly. But missed payments on credit cards, loans or BNPL agreements can lead to default notices, damage to a credit file, and potential county court judgements (CCJs) if the debt is not addressed.
The FCA's Consumer Duty is the framework that requires financial firms to act in the genuine interests of customers. In practice, this means lenders are expected to offer support when a borrower is struggling, for example by discussing affordable repayment arrangements or signposting to free debt advice, rather than simply applying charges or pursuing collections. If a lender does not appear to be doing that, it is worth contacting them directly or seeking independent advice.
Be careful if the debt feels difficult to manage alongside your regular bills. That is a signal worth acting on early, before arrears build up.
Who may be affected
- People who paid for a holiday or summer activities on a credit card and are carrying a balance.
- Anyone who used BNPL to spread costs and now has one or more payments due.
- People who took out a personal loan, payday loan, or used an overdraft to fund summer spending.
- Households whose monthly outgoings have risen and who are finding it harder to make minimum payments.
- Anyone already carrying debt from earlier in the year, for whom summer spending has added to an existing pressure.
If you are up to date with repayments and the debt is manageable, a budget review can help keep it that way. MoneyHelper's free budget planner at moneyhelper.org.uk is a useful starting point.
If you are already struggling with repayments, free advice is available before the situation gets worse. The organisations below can help.
Free debt help: where to go
If repayments are becoming difficult, free support is available from:
- StepChange Debt Charity: 0800 138 1111 (freephone, including mobiles). StepChange offers free debt advice and can help set up a debt management plan (DMP), advise on individual voluntary arrangements (IVAs), debt relief orders (DROs), and breathing space. StepChange data consistently shows a rise in enquiries in the weeks following the summer holiday period, which suggests acting early is worthwhile.
- National Debtline: 0808 808 4000 (freephone). Independent debt advice for people in England, Wales and Scotland.
- MoneyHelper: 0800 138 7777. The government-backed money guidance service, which can also direct you to regulated debt advisers.
- Citizens Advice: Free, confidential advice available online and in person across the UK. Citizens Advice can help with priority debts, such as rent, council tax and utilities, as well as unsecured borrowing.
You do not need to be in crisis to contact these services. Getting advice early generally leaves more options open. It is also worth asking an adviser about the Breathing Space scheme (formally the Debt Respite Scheme), which can pause most creditor enforcement action and interest for up to 60 days while you get advice and agree a plan.
What to read next
- Debt consolidation: what it is and how it works
- Payday loans: costs, risks and alternatives
- Buy-now-pay-later: what changes with regulation
- Getting financial advice
Sources
- StepChange Debt Charity, stepchange.org
- MoneyHelper, moneyhelper.org.uk
- National Debtline, nationaldebtline.org
- Citizens Advice, citizensadvice.org.uk
- Financial Conduct Authority, fca.org.uk: Consumer Duty framework; BNPL regulation policy statements
- The Insolvency Service, gov.uk: Breathing Space (Debt Respite Scheme)