How Easy It Is To Get Into Serious Debt

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Kathy

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I had an MBNA card last year which I rarely used. Therefore, I cancelled it and used one of the others where the interest rate was a lot lower.

Today, through the post I received a platinum card, very pretty, with a credit limit of ...... wait for it £39700!! :o I kid you not. I will sign it, and then rip it into a thousand pieces and distribute the bits between a few dustbins.

It was tempting to go out and buy a couple of cars, a new horse, some new designer clothes but then I remembered..... I would have to pay all the money back. :blink:
 
A few years ago I moved house. I was rebuilding another house at the time and as is the want with these things, it went over schedule and over budget. Instead of taking out a new loan I maxed out the credit cards and overdraft - not very clever, but I wasn't particularly worried as I had a buyer for my own house and knew the situation would be resolved as soon as the building work was finished.

MBNA would have know nothing about the move, the reason for what must have looked like a drastic declination in my financial health or the forthcoming sudden improvement of the financial situation. While they saw my card was maxed out for about 4 months with only minimum payments made, they increased my credit limit, without invitation, on the card by a few thousand and sent me invites for personal loans.

In circumstances like these, the courts should write off any additional loans given to eventual defaulters by a company who should have evidence their clients are struggling financially, it might just make them think twice about offering it.
 
Some of these credit card companies are quite shocking in the way they operate and I can fully understand how people can get themselves into further debt when they are bombarded with temptation from some credit card companies.
 
What infuriates me is that they start sending teenagers these cards as soon as they are eligible for student loans.

I heard an incredible statistic this morning which was something like the UK's personal debt increases by £1milllion every 40 minutes - which I found hard to believe. I come in from the yard at around 9am and have been watching the first few minutes of that Meet The Bailiff prog on BBC1 while I make my porridge. Quite incredible that people run up debts of £27K + and feel that it is unreasonable that they then forfeit their wordly goods to pay for it....

The concept of living within your means and/or saving up for something you really want is alien to a lot of people under 40 these days! It was interesting, though, to listen to R4 and a young mother of three who worked part-time and received benefits who hadn't had a family hoilday for several years, as they simply couldn't afford to save enough to go on one. There's a charity to assist families in real need to actually have a week away that will make a real difference to her life and her children and partner and I hope they have a wonderful time, as they're the ones who really need help.
 
Meet The Bailiff prog on BBC1
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Its staggering, isn't it? Saw it a couple of weeks back with this guy who had run up tens of thousands buying everything from DVDs to mp3 players to cameras to pedigree cats! The most depressing part is at the end where they draw up a plan for them and cheerily point out "you can be debt free in just 7 years!".
 
I haven't seen the end of one of these yet, Gareth - I am up in my office by then! But it really is gobsmacking that people dont equate using their credit money as actually spending cash. It really doesn't seem o register with them.

That bailiff guy is gorgeous though - he can come and do my inventory any time :P
 
Originally posted by Songsheet@Jan 26 2006, 02:23 PM
What infuriates me is that they start sending teenagers these cards as soon as they are eligible for student loans.
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Yes - and they'll give a student anything they want, even thought they have no income, and refuse people earning a decent enough wage a card!!! It's ridiculous - everything to do with going to University is grooming students to be £30k in hock by the time they can start work and good ol' President Tone made the situation a whole lot worse when he decided that students should pay their course fees. Is it any wonder the UK is short of doctors/nurses & have to appeal abroad to get staff in?
 
It infuriates me that so many people can run up these massive debts knowing that with one phone call you can basically declare yourself bankrupt and wipe the debt away. It's far too easy to run up these debts on credit cards, like Songsheet rightly said, forgetting that this is "real" money you are actually spending.

There should be far more stringent checks on people's earnings before any credit limits are set ie. proof of earnings and regular checks that these people are still in employment or can at least afford the repayments. The sharing of this information with a central organisation should be instigated so that people are not bombarded with more and more cards if they are already struggling with the ones they already have. Once you are in debt, it can be easier to apply for another credit card, and juggle the ever increasing debt than face the problem and try and resolve it.
 
Yes, and that's why the credit card companies love it - they have got you by the short & curlies & they know they can earn a massive whack of interest on the top. They have no interest in seeing people pay off their debts, they want them to increase their debts so they are forever beholden to that company. It's not a lot short of daylight robbery - a friend of mine was telling me she got a flyer through the door from Yes Car Credit the other day - they charge a whopping 32% interest on their loans! That shouldn't be legal.

I have debts, yes, but they aren't that big & they are being managed & reduced - in the shape of a loan. Like so many have said on this thread, too many people get tied up not only with credit cards, but loans, catalogue balances, HP on cars (for example), as well as credit on everything from TVs and electrical goods to household furniture and get to the point where they don't actually own anything, they just owe far more than they can afford to repay, and far more than the actual goods are worth.
 
My mother always told me "If you can't afford it, you don't need it".

That was probably sound advice. Unlikely to be heeded by many, but sound advice nonetheless.
 
something like the UK's personal debt increases by £1milllion every 40 minutes
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If Horse races are 40 minutes apart and Honest Tom is on a streak of bad luck I would imagine this statement to be true.
 
:lol: :lol:

About Yes Car Credit - there was an expose on the company by Watchdog recently. Apparently, they're flogging off bangers which have no more had their 100-point check or whatever it is, than I have. The undercover cameramen found mechanics lying through their teeth about fixing things which were wrong, and the cars were being passed as ready to drive by lying 'supervisors' to the unfortunate buyers. A company which deserves a massive swerve.
 
One of these days, I'm going to phone Norwich Union direct. I'm going to tell them my car is a hatchback and demand they quote me happy on just that alone. If it's good enough for the guy on the advert....
 
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