According to official goverment statistics the average person in the UK has £30,000 of debt excluding mortgages and if their income is £20,000 or less they are classed as officially living on the poverty line.
I meet many people in the course of my work who exclaim "I dont have any debts only a mortgage". A morgtage is a LOAN secured on a property, you dont own that pile of bricks until you have paid every last penny back to the bank or building society. Its DEBT, with todays financial markets teetering on collapse and the stagnent housing market it can only go one way down.
I am 100% certain there will be a major drop in property prices, houses not selling and a worldwide econominc collapse. We cannot carry on living in this buy now pay later society, debt creates poverty, creates unemployment, creates a social underclass.
How many of us have numerous credit cards in our wallets that we struggle to make minimum payments to? How many of us will pay for christmas by plastic? how many will use one credit card to pay off another? A very dangerous practice that will lead into a dolwnward spiral of debt,stress and worry.
Credit card companies are not blameless, a few years ago I had several credit cards, some personal some for business use. As my outstanding balance steadily increased I regulary borrowed from Peter to pay Paul, when my business hit a tough spot I propped it up with my credit card.
Without asking I had my credit card limits increased from £3000, to £6000 to £10,000 in the space of a year. remember no request from me, done automatically by the credit card company, its an enticement to spend.
From the feedback I get this is a regular practice by the financial institutions to hook you in, EGG appear to be one of the worst offenders of this practice from the hundreds of e mails I get. (I was with egg this is what happened).
If you struggle with credit card debt DONT TAKE OUT ANOTHER CARD TO PAY OFF THE EXISTING ONE IN ANY CIRCUMSTANCES. Write to the credit card company, explain your financial situation clearly and honestly. Offer to enter into a payment arrangement, ask them to freeze interest for a period in order for you to reduce the outstanding balance. If you really cant pay make a token payment of £1 a month, get in touch with a consumer debt association who will provide you with standard letters you can send. Above all DONT DO ANYTHING STUPID OR SILLY, its not worth it.
