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Debt and the city: when retail leads us to therapy

The credit binge might seem a long time ago, but in the past few years millions of Britons have got used to splashing out on the latest must-have shoes, clothes, gadgets and other luxuries. They would simply slap their shopping on the plastic – to pay off at some point in the future.

But now the future has arrived and the signs of debt stress are now everywhere to be seen. The Consumer Credit Counselling Service (CCCS) says 45 per cent of the cases it deals with are linked to credit cards, while 23 per cent of all enquiries to Citizens Advice in 2006-07 related to both credit and store card debt.

Yet still many thousands of consumers will sink into the red because of a compulsion to shop.

Retail therapy may be glamorised in the new Sex and the City movie, but it can leave people emotionally and financially threadbare. "A preoccupation with buying can become surprisingly time-consuming, both in terms of fantasising about goods and actually shopping," says Helga Dittmar, a psychology lecturer at Sussex University and author of the book Consumer Culture, Identity and Well-Being. "It can lead to neglect of work commitments and family and friends. Compulsive buyers end up experiencing self-blame, guilt, anxiety and depression."

Traditionally, women have been branded the big spenders, but recent US research revealed that almost as many men are shopaholics. Women tend to trawl the shops for clothes, shoes and accessories, while men are more likely to become compulsive collectors. And even in these credit crunch times, binge-buying is becoming more common.

So how do you spot the signs of addiction in yourself or those around you? If you use shopping as a quick fix when you're down, spend more than you can afford, hide purchases or never use them and feel guilty about your buying habits, you may have a shopping disorder. "You become possessed by the need for things, but even while shopping, you know it won't transform your life – the magic won't work," says psychotherapist Adrienne Baker.

But is binge shopping really that bad? Debt charities seem to think so: they refer some clients to addiction treatment centres. "There's no point dealing with debts if you don't learn to overcome personal behaviour," says Beccy Wilks of National Debtline. However, a spokeswoman for mental healthcare provider The Priory Group dismisses compulsive spending as "a hobby that some people over-indulge in".

It's much more than that, says Ms Baker: "What we're really talking about is people not feeling very good about themselves. Psychotherapy can help overcome this, though make sure it's someone registered with the United Kingdom Council for Psychotherapy (UKCP).

On the financial side, imposing self-discipline is the key. "Clear the balance on cards before going on spending," says Frances Walker of the CCCS. "A certain level of debt can spiral very fast when you only make the minimum repayment."

Store cards are a particularly bad idea. Shops tempt customers with incentives such as 10 per cent off when they take one out. But this form of plastic has a higher interest rate than all but a handful of credit cards.

Charities say that if debts excluding the mortgage total more than 20 per cent of take-home pay, you're over-extended. Drawing up a budget for monthly income and outgoings will help – as will paying by cash for your shopping.

"I had a store card for every shop in town. When I went shopping on a Saturday, the only cash I spent was on my bus fare."

Yet still Sarah Kennedy, a 34-year-old administrator from Cardiff, was shelling out £200 to £300 a time.

She loaded up with shoes and clothes. "If I bought a top, I'd buy one in every colour." But her purchases came with guilt attached. "I'd come home and put the bags in the bottom of the wardrobe to hide them. And then I'd forget about them."

Sarah managed to hide her compulsion from her family and friends, but as a result of making only the minimum payments on cards and personal loans, her debts climbed to £33,000.

It was being refused another loan that made Sarah realise she had to act. A friend suggested the Consumer Credit Counselling Service, which persuaded her to cut up her cards and work out a payment plan. The CCCS even wrote to her creditors.

Six years later, she has paid off every penny and only shops with cash. "I'm the happiest I've ever been."