British Credit Cards: Strain on Households

Over the last decade, Britain has enjoyed something of an economic boom. Unemployment and inflation have both been on the low side, as well as interest rates. Mortgages have been easier to come by, as well as personal loans, secured loans and so on. The demand for houses has resulted in an escalation in property value that has been almost unprecedented; which has had the effect of making us all feel that we were a lot better off than we actually were.

The banks have been encouraging us to spend, with offers of interest free periods on credit cards, accompanied by pictures of new cars, caravans or holidays to tempt us to apply. The result has been that over the last few years, the UK has become a generation of consumers, which expect everything now. Gone are the days of saving up for luxuries, like our parents and grandparents once did.

The situation is not helped by the sheer number of different cards available, and the competition between the card companies. It is not uncommon to receive half a dozen pre-approved applications in one day. The temptation is all to plain to see, and for consumers that lack the necessary self control, it is easy to predict that there may be trouble ahead.

Since the onset of the global credit crisis, and the subsequent recession, it is hardly surprising that the wheels have now fallen off the cart. The fall in the housing market has reduced the assets of many people to zero, whilst at the same time virtually killing off the secured lending, and mortgage business. There has also been a sharp rise in jobless figures, which is only expected to get worse, with unemployment predicted to hit 3 million before the end of 2009.

For immediate help with your debts please call The Debt People on 0161 927 8001 today

Over the last decade, Britain has enjoyed something of an economic boom. Unemployment and inflation have both been on the low side, as well as interest rates. Mortgages have been easier to come by, as well as personal loans, secured loans and so on. The demand for houses has resulted in an escalation in property value that has been almost unprecedented; which has had the effect of making us all feel that we were a lot better off than we actually were.

The banks have been encouraging us to spend, with offers of interest free periods on credit cards, accompanied by pictures of new cars, caravans or holidays to tempt us to apply. The result has been that over the last few years, the UK has become a generation of consumers, which expect everything now. Gone are the days of saving up for luxuries, like our parents and grandparents once did.

The situation is not helped by the sheer number of different cards available, and the competition between the card companies. It is not uncommon to receive half a dozen pre-approved applications in one day. The temptation is all to plain to see, and for consumers that lack the necessary self control, it is easy to predict that there may be trouble ahead.

Since the onset of the global credit crisis, and the subsequent recession, it is hardly surprising that the wheels have now fallen off the cart. The fall in the housing market has reduced the assets of many people to zero, whilst at the same time virtually killing off the secured lending, and mortgage business. There has also been a sharp rise in jobless figures, which is only expected to get worse, with unemployment predicted to hit 3 million before the end of 2009.

For immediate help with your debts please call The Debt People on 0161 927 8001 today

All of this has coincided with the UK having the largest level of personal debt ever, at just under £1.5 trillion.

The net result has been that, for many, the debts have become unmanageable, and the UK now faces a financial crisis of record proportions. There are now more consumers than ever that are struggling with monthly repayments on their credit card debt, as well as personal loans, mortgages and everything else. Over the last few months, debt help specialists have been inundated with requests for debt advice, and assistance from hard up consumers that are now struggling to make ends meet. The priority for these individuals now is how to get out of debt, before the situation gets any worse.

There are a number of debt solutions available for people that have become financially overcommitted. The most common choice is a Debt Management Plan, which is an informal arrangement between a debtor and their creditors, to repay debts at a more affordable rate. This can be an excellent way to solve debt problems, as it allows the debtor the opportunity to pay off their debts, and keep everything else up to date also. With debt management, all unsecured debts are gathered together, and consolidated into a single, reduced monthly payment. In most cases, interest and charges will be frozen, which allows the debtor the opportunity to make some headway into getting the debts reduced.

For larger debt levels, an IVA (Individual Voluntary Arrangement) is often recommended as the most appropriate debt solution. An IVA is similar to a Debt Management Plan, in that it consolidates all of the unsecured debts into a single payment. The difference is that an IVA is a legal agreement, between the debtor and creditors that must be nominated by a licensed Insolvency Practitioner. An IVA is set over a fixed term, which is usually 5 years, and one the IVA is complete, any remaining debt can be written off. If you live north of the border, then you may qualify for a Trust Deed, which is the Scottish equivalent of an IVA.

There are tens of thousands of consumers that are now in serious financial difficulty. And the number of people in the UK that need help in resolving these issues is at record levels. The most important thing to remember, if you are struggling to make the monthly payments on you borrowings, is to seek debt help or IVA advice now, before the situation becomes completely hopeless.

For immediate help with your debts please call The Debt People on 0161 927 8001 today