Archive for November, 2011

Consumers could fall into debt with payday loans

Monday, November 28th, 2011

With the Christmas season pretty much upon us many consumers will be gearing up to start shopping for their Christmas purchases, which could include gifts, clothes, extra food, tickets for travelling to see friend and relations, and more. However, many people will not have the available funds saved up in the current financial climate and will therefore be relying on credit in order to get them through.

Credit cards, of course, are used heavily over the festive season by those that need to buy their purchases using credit and this can lead to a worrying amount of debt, with many experiencing bill shock in January after getting carried away with their credit card spending. However, for those who do not have a credit card or cannot get further credit card finance there is another type of debt that is causing concern, which is payday loans.

Whilst payday loans can provide a financial lifeline for those who have a financial emergency and need to bridge the gap until they get paid, using these loans to pay for purchases and luxuries over the Christmas period can lead to spiralling debt, particularly for those that find they have to rollover the debt because they cannot afford to repay it in January.

One official said: “Many people might thing that a payday loan is the easy solution to getting finance to make purchases for Christmas, partly due to the ease of getting this finance and the speed at which it can be obtained. However, for those who are unable to repay the debt in full when they get paid in January the interest can be crippling and it could lead to spiralling debt, which is not the ideal way to kick off the New Year.”

Tags: shopping, gap, spending, payday, emergency, festive season

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Shops to be banned from hard selling store cards to consumers

Wednesday, November 23rd, 2011

Personal debt levels have become a huge problem for many individuals and households, and these are further exacerbated with the use of things such as credit cards and store cards that come with crippling rates of interest, leading to spiraling and unmanageable debt levels for some people. However, when it comes to store cards many consumers end up taking out these costly cards because they feel pressured into it by sales staff.

This is something that has now been recognized by officials and according to recent reports shops and stores are now going to be banned from using hard sell tactics in order to boost the number of people taking out cards, which includes a ban on free gifts and discounts, which are often used to lure people into spending money that they do not have.

For struggling shoppers whose finances are tight, the offer of a store card along with discounts and free gifts can seem like a very tempting offer. However, once they start using the card, unless they are able to repay the balance in full each month, they are charged crippling amounts of interest and the debt can quickly spiral out of control.

Financial Secretary to the Treasury, Mark Hoban, said: “The public told us that consumers can be tempted into taking out a store card by being offered a discount at the till. We’ve listened to these concerns and have worked with industry to develop a strong package of measures in response. This ban will mean that stores will not be able to offer discounts, free gifts or similar incentives to encourage consumers to take out store cards at the point of sale, or for the first seven days.”

Tags: treasury, British Retail Consortium, debt, strong package, something, staff

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Is life insurance worth it?

Wednesday, November 23rd, 2011

In a time of economic uncertainty, looking at our personal budgets, our monthly outgoings and where we can cut down our spending is a good habit to pick up. After shuffling around the credit card balances for a better rate, and looking at how much is spent on luxury items, insurances are among the first expenditure items to be cut back for the majority of households.

Which insurances are worth the monthly expenditure?

Throughout daily life, adults can pick up a portfolio of many different types of insurance. Often insurance is offered as an add on sale to gadgets and household items. In the excitement of purchasing a new gadget for the home, it’s easy to get swept up with the sales patter and see a need to sign up to monthly protection for your items.

The same is true when purchasing or upgrading a new mobile phone. Although the new smart phones are materially worth a lot of money, many of them are offered free on new contracts, yet we are still encouraged to insure our phones for monthly amounts that over the span of a year would add up to enough to purchase a new handset anyway. It’s insurances like these that it is easy to live without and to justify putting an end to the policy.

However, it pays not to be too frivolous with the cutbacks if we are consider monthly payments on policies such as mortgage life insurance.

Why is life insurance important?

When looking at the benefits of life insurance versus the cost, we should remember that paying out for life insurance is an unselfish act. The way that you personally would benefit from life insurance, or critical illness cover, would be to have peace of mind that should anything happen to you, your loved ones would be provided for in the first instance. It is of course your loved ones that would benefit from your life insurance long term.

Balancing the monthly cost of life insurance against the benefits.

The average life insurance quotes vary depending on the type and level of cover that you might require. If you are feeling that your life insurance costs are a little too much to justify in your monthly budget, before you decide to scrap this valuable cover, consider getting some new quotes. If your situation has changed medically, financially or family wise, you may find that you can decrease your current monthly payments with a new policy.

Life insurance looks out for your loved ones.

In summary, life insurance is worth it. Your loved ones will be grateful that you chose to make a small monthly sacrifice to protect them when you are gone.

Tags: Life insurance looks, term, life, lot, monthly amounts, sales patter, average life insurance

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Lotto funding for debt advice in Wrexham welcomed

Saturday, November 19th, 2011

Many people in the Wrexham area who are struggling with their debts will be delighted to hear that a new debt advice service designed to help people in the area has been awarded a quarter of a million pounds in lottery funding. The money is to be used to fund the three-year Shelter Cymru project, with around two hundred households a year receiving valuable debt related advice through the service.

The service started this autumn and prior to this the recruitment of staff was taking place. The charity has described the cash injection from the National Lottery as ‘a really big deal’ particularly given the high debt levels that have been identified amongst younger people in the area. An official from the charity said that being able to get the right advice at the right time would make a huge difference to many of those that are struggling with debt in and around the Wrexham area.

He said: “We know that people are finding things tough financially at the moment. We see it every day in our casework, while a survey carried out for us by YouGov earlier this year showed that more people are starting to use their credit cards to cover day to day expenses.”

The £250,000 grant that is given to the charity by the National Lottery will help to support the work of the group in many ways, enabling officials to help both those with easily resolved debt related issues as well as those that have more complicated debt problems that will involved a lot of liaison with creditors and other companies in order for a solution to be reached.

Tags: place, charity, shelter, wrexham area, cash injection, new debt advice service

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Brits take on more debt to fund rise in living costs

Friday, November 11th, 2011

As most households are only too well aware, the cost of living in the UK has soared over the past eighteen months, with essential costs such as petrol, food, and energy usage going through the roof whilst wages remain frozen for a huge number of workers. This has resulted in many households facing a severe struggle to make ends meet, with many having to take on more debt in order to cope with the rising cost of living.

In fact, according to recent reports Brits have taken on the highest levels of debt since the recession in the UK hit its peak in May of 2009, with many now having no other choice but to take on more debt in order to keep up with increases in the cost of living. Households are now said to have around £208.6 billion in outstanding debts on credit cards, loans, overdrafts, etc. which equates to around £9070 of debt for every household in the country.

Household debt, excluding mortgage debt, is said to have increased by around £5 billion in the past year alone, which the Bank of England said is the biggest annual increase since the recession. Brits have increased their debts by £629 million in the past month alone, and economists have said that people are now having to increase their debts simply to find their day to day living costs.

One economist said: “The rise in unsecured consumer credit suggests increased ‘stressed borrowing’ is occurring, with more people having to borrow to help finance their spending. This is a consequence of the extended squeeze on their purchasing power coming from elevated inflation, low wage growth and tighter fiscal policy. In addition, job losses are rising.”

Tags: UK, choice, power, job, outstanding debts, eighteen, May

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