Panorama - UK Personal Debt

[Beach Hut]

Usually pretty factual program, if anybody watched it, some people are heading for serious trouble on the debt front.

Totally amazed how easy it appears to get credit these days.

Seems like most of the country's households are heading for a serious crisis when the debts are called in.

 

[GUNTER]

I have a borrowing capacity on credit cards alone of some £34,000. This has been achieved by "surfing" as they call it to take advantage of interest free deals - a total of £5,000.

I have not closed the cards, merely transferred the debt. Frightening thought iF i was a spendacholic!

 

[Wozza]

Yeah, but it's not like every debt is going to be called in overnight, is it?!?

Most countries - including the UK - survive on a revolving debt.

 

[Beach Hut]

Yeah, but it's not like every debt is going to be called in overnight, is it?!?

Most countries - including the UK - survive on a revolving debt.

I appreciate that and the bailiffs won't arrive tomorrow.

Point is interest rates will go up and then what ? That's when the sh1t will hit the fan for quite a few people, coupled with a job loses.

 

[marvin]

Didn't watch it, watched Terminator 3 instead.

I too am a rate tart (or at least i was, decided to lock into a 4.9% deal instead as I think intereste rates are on the rise) and have available credit of around £40,000.

Credit is too easy to get in the way of credit cards and loans but things like mortgages can be very difficult, if you don't lie.

Thisn is about the debt mountain, no it may not all be called in at one time but just assume that interest rates rise by 2% (I think they are going to do that and more in the next 2 years) then see howmany people in debt up to their eyeballs default on their loans.

That bit is the scary bit.

 

[Lord Bracknell]

Credit is like any other commodity.

It's sold by big business - at an inflated price. Sometimes with an attractively worded inducement that fools us into believing it's cheap, or even "free". It isn't.

We buy it, even though we can't afford it. And we don't usually need it, either.

 

[The Clown of Pevensey Bay]

I think we've done this before, but how much debt are we all in? I've got about £1200 on a credit card, which will take a year to repay. I'm paying off a car loan for the next two years at about £65 a month, and I've got about £11K of student loan left... although that comes straight out of my payslips.

Worrying thing is, I know that's not a great deal, when compared with some people's debts.

 

[Bozza]

The three credit cards in my wallet have combined limits of just short of £50k (£17k, £16k, £16k) - these are the cards I use for purchases. In addition I have two or three cards at home that have limits of, I think, about £15k each.

A new Mastercard turned up on Saturday with a limit of £6k. I'm phoning them today to ask for £15k, to match my other cards, otherwise they can have it back.

Currently, I owe somewhere just short of £30k - this is sitting on two of the above cards.

I use the term 'owe' loosely because I have a savings account with just over £30k sitting in it. The balances on the cards are interest free so I make minimum payment only, and don't use the cards for purchases. Even with the current low level of interest rates, I'm earning just under £100 a month simply by using interest free balances to the max and sticking the money into the highest yielding account I can find.

Credit is ridiculously easy to get hold of - so use it to your advantage!

 

[Simster]

Quite like that idea Bozza. Out of interest, where does your wife stand if - god forbid - you pass away? Is she liable to pay off your debts with that £30k in your savings account? If not, then even more reason to do what you're doing.

Personally, I have 2 credit cards, both with £12,000 limits. One of them I never use and is simply there in case of an emergency (or if I need to get a large amount of credit quickly), the other is a Halifax Platinum Card which pays 1% cashback and we put everything we possibly can on there. Not only do we always clear our balance, but (as a rule) if we haven't got it in our current account at the time of purchase, we don't buy it using our credit card.

That 1% cashback is handy. We're set to get £350 back from Halifax in February for one year's use, along with the interest accumulated by not having bought using a bank account instead.

My car is paid for, I have no loans or HPAs and the only debt I have is my mortgage (50% of house value). Wasn't always that way though, but the wife is very astute managing money and I must admit I like living this way.

 

[Bozza]

Quite like that idea Bozza. Out of interest, where does your wife stand if - god forbid - you pass away? Is she liable to pay off your debts with that £30k in your savings account? If not, then even more reason to do what you're doing.

In my will, the £30k is left to fund the bar bill at an NSC piss up, with the remainder to pay for bandwidth!

In all seriousness - I don't know - I'd expect the debt to be passed to her. No idea though, to be honest.

My car is paid for, I have no loans or HPAs and the only debt I have is my mortgage (50% of house value). Wasn't always that way though, but the wife is very astute managing money and I must admit I like living this way.

Sounds very similar to us. In my early 20s I ramped cards for all they were worth. Having to pay back £10k or so (that is accumulating interest at a rapid rate) just to get back to a 'nothing' position is not good. Neither is moving home during a booming property market and using a lot of your equity gain to pay off debt.

Very keen not to get close to that sort of position again. I consider paying interest to be a terrible waste of my money.

 

[bhaexpress]

I wonder how big Dwayne's personal debt is .....

 

[Marshy]

I dont do credit cards .....too sensible by far I know.

 

[fatbadger]

Me too. I've never had, and never will have, a credit card.

 

[Uncle Spielberg]

I think people's mindset changed completely on 11/9/01. Rather than plan for the future and invest in savings and pensions for 30 years time people are thinking lets live for today as there may well be no world left in 30 years time.

This explains the live for today, usually on credit attitude. Also with 40% of the value of funds being wiped out on investments and pensions in the last 3 years people have lost all confidence in saving for the future and the stock market.

They would rather buy a new car, go on a cruise or do the house up. People are re mortgaging and taking money out to pay off credit commitments and do home improvements.

However I really believe this credit boom is down to the after effects of 11/9/01 and the ongoing state of the world. Peoples whole mindset changed on that day, I know mine did.

 

[Bozza]

Strange view (the no credit card one).

A credit card provides me with a degree of protection on purchases beyond that which I believe most debit cards offer and beyond that which cash and a cheque offers.

A credit card allows me to earn something for my spending. I currently choose a cash payment similar to Simster above, but one could chose airmiles or points that can be redeemed against products.

Also, as above, credit cards currently allow me to 'earn' nearly £100 a month for doing absolutely nothing.

 

[Uncle Spielberg]

In my job I see it every day and people are definately " living for today " and who can blame them.

 

[beorhthelm]

I dont really think 9/11 affected people as much as the media makes out. Seriously, i dont think its changed my out look on life one bit. we've had that sort of thing (ok not the scale) for 20 years with the IRA.

The progrm showed that the ramping of credit started 5 or so years ago. The causes are partly the internet bubble, where alot of people made a lot of money quickly. Yes they would have lost alot, but by then they would have bought a house or some such.

i believe the living for today attitude, which i think your right about, is more down to the 20-somthings being Thatcher's children. Many will not want to admit to that, but we where brought up in a culture that said if you want something, go and get it.

 

[Soton Seagull]

I owe far too much, problem is reality hasn't hit me, and all sensible ideas go out the window when someone asks if I fancy going to the pub!

 

[Lammy]

Going back the the program in question, was I the only one laughing at that couple that owe around £50,000!!! And they're got sweet FA to show for it!

funny also how they said they only got in trouble when their circumstances changed, i.e. he retired and she had an accendent!

Now would you retire with £50k to pay off! What sort of pension was he expecting!!

 

[looney]

Usually pretty factual program, if anybody watched it, some people are heading for serious trouble on the debt front.

The Panorama programme tends to be leftyist and alarmist/sensationalist. Occaisionally it gets things right.

Didn't watch the programme but someone pointed out all debt is staggered.

did they say what percentage went on business start ups? If high that can be a very good thing.


Never owned a credit card never will, agree with bracknell as most loans are to an exstent deceptive.