A quarter of consumers struggle with credit card debts
December 28, 2010
According to recent reports around a quarter of borrowers are struggling to repay their credit card debts, and this is a figure that could get worse following the intense spending that has been done on plastic over the Christmas period and during the ongoing sales.
A report was released by the Bank of England showing that around 25 percent of credit card users were already struggling to cope with their credit card debts, and with so much spending having been done on credit cards over the Christmas period, and more expected over the New Year and during the sales, the number of people struggling with credit card debts could increase sharply.
Credit card companies are set to come under new regulation from this weekend, and this could go some way towards helping those crippled with interest costs charges by their providers, as it means that the credit card firms will have to allocate repayments to the higher interest debts on the card first rather than to the cheaper debts, as is the case with most providers at present.
For many people credit cards are the only form of credit that they can get due to factors such as their credit or financial status, and many therefore have no other option when it comes to borrowing. However, it is possible for those with decent credit to switch to a lower interest card, or even transfer their balance to a 0 percent balance transfer card, in order to make their credit card debt more manageable.
In its report the Bank of England stated: ‘Interest rates on unsecured debt tend to be much higher than mortgage interest rates and appear to have been less sensitive to the changes in monetary policy (interest rates).’
Households can make a different to their finances next year
December 16, 2010
For many households Christmas can be the worst time of year financially, with social events, presents, new outfits, and extra food and drink that all needs to be paid for. Whilst this is a very exciting time of year it can be financially draining for many households, and this is why it is advisable for families to have some sort of plan in place to sort out their finances after the expense of Christmas.
Of course, just after Christmas comes the New Year, and this is the perfect time to get your finances sorted so that you can start off on an even footing and enjoy the benefits of having a more streamlined budget throughout the year. Sitting down together just for a few hours after Christmas can help families to look at their finances with fresh eyes and reduce the amount that is being paid out for a more prosperous New Year.
Getting your finances into order as early as possible after Christmas means that you can work out a way to pay off any debt that you may have accrued over the festive season as well as enabling you to do some financial planning for the remainder of the year. This year taking these measures could be especially important this year as the Council of Mortgage Lenders has warned that repossession levels could rise next year, and failure to get finances sorted out could put people at increased risk of losing their homes through repossession.
It is a good idea for all adults in the households to sit together to go through the household finances, as everyone could have some good ideas about where cutbacks could be made. Shaving just a few pounds here and a few pounds there can amount to a significant saving each month, so look at literally everything that comes out of your account to see where you might be able to make savings.
Also, nominate one adult in the household - preferably someone that is pretty good with researching online - to look at alternative plans and providers for things such as utilities, insurance, etc, so see if there are any better deals out there. Switching services such as these could help to reduce outgoings significantly, and switching is very easy these days thanks to the Internet.
It is also worth the heads of the household looking at financial commitments to see whether there is any benefit in consolidating unsecured debts to reduce outgoings, as this can help to cut the amount paid out as well as the amount of creditors that you have to pay.
Homeowners need to get finances in order to cut risks
December 16, 2010
A stark warning has recently been issued to homeowners in the UK - to get their finances and their homes in order to avoid becoming part of the rising number of repossessions predicted for next year. The warning was issued by the firm EuroDebt, which said that repossession levels are set to rise next year, and homeowners that did not take action could find themselves on the receiving end of repossession action.
Officials from the firm said that homeowners need to get their finances and their homes in order to boost their chances of avoiding repossession and other problems as the climate continues to remain in a difficult and challenging state. The warning comes after the Council of Mortgage Lenders predicted that repossession levels would increase next year.
An official from EuroDebt said that losing the home could be the most devastating thing ever for most people, and that often this happened through no fault of their own. He added that many people were already in arrears due to their financial struggles, and that rising unemployment figures could result in the risks being even higher for many homeowners, as this would further impact on their financial situations.
A EuroDebt spokesperson said: “The CML’s annual forecast paints a gloomy picture for homeowners. Losing your home is one of the most devastating things that can happen to an individual - and for many people, this will be through no fault of their own. In 2010, 15% of our clients were already in mortgage arrears when they came to us for help and with unemployment figures rising it seems for many, the worst is yet to come. While levels of arrears and repossessions have been falling helped by low interest rates, 2011 is going to be a very tough year for many households as the spending cuts really take hold, impacting jobs and household income levels. As a consequence, a rise in mortgage arrears and repossessions is predicted.”
Trading Standards warns over loan sharks
December 2, 2010
Officials from Trading Standards have issued a warning to consumers to steer clear of illegal loan sharks, highlighting the dangers of taking out an illegal loan with one of these unscrupulous lenders. With the run up to Christmas many consumers may be desperate for money to find their Christmas purchases, and with the traditional lending market as restricted as it is many may be tempted to turn to loan sharks.
Officers from Trading Standards visited Barton recently to warn about the dangers of taking out loans from illegal loan sharks. It is thought that around 300,000 households in the UK use loan sharks, and in some cases the lenders have resorted to physical violence and more in order to get the money back from those that have borrowed it, usually with horrendous sums of interest on top.
Trading Standards officers decided to be more proactive because figures have shown that 20 percent of those taking out loans from a loan shark do so in the run up to Christmas. They wanted to make it clear that people need to avoid these loan sharks at all costs. They have issued a hotline number for consumers to contact officers in confidence with regards to illegal loan sharks.
Many people have had their lives ruined as a result of borrowing from loan sharks, with many having to cripple themselves financially in order to repay the money and others suffering the mental and physical scars of being unable to make the repayments.
One consumer said: “It would be very very easy to go to a loan shark because when you’ve got nothing and they’re there saying: ‘Oh come on, you can have this £200, it will see you, just to get food and things’ you’re going to say yes.”