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London is most drastic for plastic

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London has been named the credit card debt capital of the UK. It tops a new list of debt hotspots ahead of Glasgow, Hatfield, Edinburgh and Aldershot. The research by Experian reveals that people in areas such as Liverpool Street and Bishopsgate, the West End, Cheapside, Wandsworth–Clapham Junction and Putney are increasingly reliant on credit cards to cover living costs and large purchases.

They tend to be young renters who have the highest levels of expenditure, debt and social aspirations. But living on plastic, known as persistent debt, can be the first step on the road to financial disaster. It can leave people unable to cope with a sudden expense or lifestyle change, such as losing their job. With an estimated three million people across the country reckoned to be in persistent debt. ES

 

 

Life in plastic, it's fantastic - Imagination, life is your creation (do you remember the Barbie Girl song?)

 

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Payday loans and credit cards blamed as report warns average family will be £15,000 in debt by 2020

The average family will be £15,000 in debt by 2020 as Britain struggles with a living standards crisis, a report warns today. And the TUC says that millions of families are “running on empty” and using payday loans and credit cards to pay for essentials. An analysis of official figures by the TUC finds that unsecured debt per household will reach a record high of £13,900 this year. Unsecured debt per household was £13,200 in 2016 – the highest figure since the financial crisis, and only marginally below the peak of £13,300 in 2007. Unsecured debt includes credit cards, store cards, pay day loans, bank, student and car loans, but excludes mortgage payments.

The report blames low wages and low investment for pushing the economy into a “danger zone” and the next government must tackle the crisis.

Mirror

 

Nothing to do with record low interest rates and sky-high housing costs.

Edited by rollover

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5 minutes ago, rollover said:

 

Nothing to do with record low interest rates and sky-high housing costs.

I love averages...  This family has £0 in debt so another family will have £30,000.  I wish them well with it.

They can also keep their living standards.  Give me quality of life any day.

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I wonder what percentage of people are doing this and successfully exploiting cashback/points/interest free. I do this all the time and never pay interest but would be counted as part of the group in the article.

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Household debt on the rise as Brits feel the pinch

British consumers are whacking more purchases on credit cards and increasingly turning to discount retailers as rising prices squeeze household budgets, data showed today. The amount borrowed by consumers on loans and credit cards was £1.5 billion last month and is up 10.3% across the year. Households are saving less than at any time on record. Family budgets are feeling the pinch. Amid poor wage growth, households are increasingly turning to credit cards  and unsecured loans to balance  the books.

The bounce follows a spike in inflation, blamed on the 13% plunge in the pound’s value since last year’s Brexit vote. ES

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Watching the tennis on ITV4 (French Open) today, and every other advert was for loans/credit. Shocking. I take this as a major sign that we are nearing the crisis point.

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Credit cards? Who needs those high rates?

 

It's never been cheaper to borrow. 5 years ago, I'd be paying 7% odd to borrow up to £25K over 5 years.

 

Now I can borrow from 2.9% unsecured up to £40K over 7 years.

 

hmm should I treat myself or go all in Bitcoins? 7 years of penury though if it goes poof!

If £100 invested in Bitcoin turned into £75m in 7 years (odd). Then that's 750,000x return. If the past predicts the future:

 

£40,000 x 750,000 = £30bn Woohoo!

Edited by 200p

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On 27/05/2017 at 11:15 PM, SE10 said:

I wonder what percentage of people are doing this and successfully exploiting cashback/points/interest free. I do this all the time and never pay interest but would be counted as part of the group in the article.

Plus the extra security you get with a credit card compared to a debit card. And it is more convenient than cash. I don't end the day with a pocket of change.

Since contactless I use my CC for almost all my purchases. 

I would imagine that the majority of Londoners use their contactless credit cards rather than Oyster cards, maybe explaining the presence  of Clapham Junction and Liverpool Street in that list 

Edited by funinhounslow

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58 minutes ago, funinhounslow said:

Plus the extra security you get with a credit card compared to a debit card. And it is more convenient than cash. I don't end the day with a pocket of change.

Since contactless I use my CC for almost all my purchases. 

I would imagine that the majority of Londoners use their contactless credit cards rather than Oyster cards, maybe explaining the presence  of Clapham Junction and Liverpool Street in that list 

Exactly the way Londoners are including me. 

I never carry cash as 99% of places in London accept card, so tap and go/get cashback. 

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1 hour ago, funinhounslow said:

Plus the extra security you get with a credit card compared to a debit card. And it is more convenient than cash. I don't end the day with a pocket of change.

Since contactless I use my CC for almost all my purchases. 

I would imagine that the majority of Londoners use their contactless credit cards rather than Oyster cards, maybe explaining the presence  of Clapham Junction and Liverpool Street in that list 

Indeed silly not to use CC for the added security benefits in addition to cash flow. I've spent a six figure sum on CC over the years (including oyster) but have paid off in full every month and never paid a penny in interest.

Many people in those areas also have jobs with large expenses that you get reimbursed for later which CC is very useful for. [A form of corporate credit by proxy]

I bet Experian hasn't picked up on these nuances.

Rail season ticket purchases are falling in London being replaced with more flexible Oyster/contact-less usage instead

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Credit card debt rose to a fresh record of £67.3bn in February, I think personal debt will drive the house price crash, as more people turn to loans and plastic to prop up their dwindling finances. unable to pay rents and mortgages. Landlords can try to drive up rents to cover S24 but I think that will drive borrowing and debt higher or just mass relocation away from those high rent areas leaving properties empty and landlords forced to sell or top up their mortgages from their own pockets. We are in a period where key workers in major cities are living on a knife edge of finances, record increases in debt, I don't think are just associated with new STUFF, but turning to debt for survival. That is a very slippery slope, and for those just spending on STUFF its another nail in the coffin as they will also find out that borrowing is easy, repayment not so much, especially as prices rise.

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