Jump to content
House Price Crash Forum
Sign in to follow this  
libitina

Credit Cards

Recommended Posts

I can't find a link on their site, but on the business part of the active service is a piece about consumers use of their cc's for everyday items such as food and petrol being up by something like 11% so far this year.

Could this be a sign that more people have more going out than they do coming in? Robbing Peter to pay Paul?

Can anyone find the story?

Share this post


Link to post
Share on other sites

I can't find a link on their site, but on the business part of the active service is a piece about consumers use of their cc's for everyday items such as food and petrol being up by something like 11% so far this year.

Could this be a sign that more people have more going out than they do coming in? Robbing Peter to pay Paul?

Can anyone find the story?

I was listening to a guy telling a friend that his living costs were now greater than his (and partners net income).

They could not stop working off course but made up the difference with the credit card, when that option runs out they will reach a point of collapse because without money for fuel, he can't travel to work.

The debt increases. Carry on regardless.

http://www.creditaction.org.uk/debtstats.htm

Edited by deano

Share this post


Link to post
Share on other sites

Credit dependency? Of course there is no way this sort of thing can be predicted, so we kept be told, just like bubbles. Depends where you look though.

http://216.239.59.104/search?q=cache:LVGXl...uk&ct=clnk&cd=1

A buddy of mine who worked in the mortgage backed securities told me that the models they used to predict foreclosure basically had the owner eating dogfood until divorce or being fired meant he could not longer make payments. At that point he either sold the house and pocketed the appreciation, or gave the keys back to the bank.

One extension of this model is to expect credit card applications spike before an increase in foreclosures -- people will try to use their credit cards to cover monthly payments. Credit card usage is down (people are refinancing their homes and getting cash that way) so banks may initially see an uptick in credit card activity as good news.

Share this post


Link to post
Share on other sites

Surely they can just go bankrupt? It's quick, easy, socially acceptable (even a bit avant-garde (French for 'before the station') and, hey - everyone's doing it!

Its not that simple. If you have rented or social housing its easy. If you have equity, that has to be used before bankruptcy or you will have to sell. If you sell, the equity will be used to clear your debt and you are not then entitled to social housing. This tempts people in this situation to use up all equity by refinance then go bust, then you keep your home.

In the last bust, those that kept thier homes were those that lost thier jobs. The state took over the mortgage payments. Those that lost, did so because thier payments went up but thier earned net income did not.

Edited by deano

Share this post


Link to post
Share on other sites

This increase in the use of credit cards to pay for everyday items was also referred to in a story from Yahoo! News UK about a month ago...

"Britons are increasingly using their credit cards to pay for everyday items, including groceries, petrol and bills. One reason for this is that monthly statements help people keep track of exactly where their money is going."

...and one reason we'll never win Eurovision again is because everybody else in Europe hates us! :rolleyes: (Oh, and also just the other little point that all our entries recently are crap! :blink: )

Share this post


Link to post
Share on other sites

This increase in the use of credit cards to pay for everyday items was also referred to in a story from Yahoo! News UK about a month ago...

...and one reason we'll never win Eurovision again is because everybody else in Europe hates us! :rolleyes: (Oh, and also just the other little point that all our entries recently are crap! :blink: )

Still can't find it. Went back and looked and it said Morgan Stanley say that 55% of peoples monthly CC spending is on basics like food and petrol.

Edit: They say the reason for this is CC bonus schemes. :rolleyes:

Edited by libitina

Share this post


Link to post
Share on other sites

either way, we have to remember that lots and lots of people were really STUNG.

just like now they thought it wouldnt happen to them. after all, this was bricks and mortar.....

crashes happen.

Share this post


Link to post
Share on other sites
Guest Winners and Losers

Just received in post yesterday pre approved Amex Gold - credit limit?

Wait for it!

$50,000!!!!

Lolly water.

Share this post


Link to post
Share on other sites

My wife received a letter from Barclay Card this week stating that she needs a credit card for modern living.

I use my Tesco's credit card for every day living but have never paid a penny in interest. You get double club card points for each pound spend and as most of my daily living costs are spend at Tesco's, it makes sense.

Share this post


Link to post
Share on other sites

I can't find a link on their site, but on the business part of the active service is a piece about consumers use of their cc's for everyday items such as food and petrol being up by something like 11% so far this year.

Could this be a sign that more people have more going out than they do coming in? Robbing Peter to pay Paul?

Can anyone find the story?

In all fairness, I'd be included in this stat. I pay for the vast majority of stuff on CC. On the other hand, I settle the CC bill in full every month. How many of the above are doing that?

Share this post


Link to post
Share on other sites

In all fairness, I'd be included in this stat. I pay for the vast majority of stuff on CC. On the other hand, I settle the CC bill in full every month. How many of the above are doing that?

Funnily enough, it doesn't state that ;)

Share this post


Link to post
Share on other sites

Mintel stats

http://www.marketresearchworld.net/index.p...&id=558&Itemid=

"The increasingly widespread availability of credit has meant that many consumers have found that they no longer have to save up in order to finance major purchases, but instead can simply fund their current spending plans through a variety of credit arrangements. In certain situations, credit has effectively replaced the need to save up for purchases," adds Paul Davies.

Credit cards are the most common form of borrowing with almost three in ten (29%) holding an outstanding balance on one of these products. Furthermore, some 6% of adults also have an outstanding balance on a store card.

"This high incidence of credit card and store card debt partly reflects the ease with which consumers can borrow through these accounts. These products have acted to blur the distinction between spending and borrowing and have helped to create a ‘spend now, pay later’ culture. The credit card industry's promotion of 0% purchases and balance transfers for fixed time periods will also clearly have encouraged some consumers to borrow money via this route," comments Paul Davies.

Edited by OnlyMe

Share this post


Link to post
Share on other sites

Still can't find it. Went back and looked and it said Morgan Stanley say that 55% of peoples monthly CC spending is on basics like food and petrol.

Most of the spending on my CCs is now food and petrol, it's an easy log off what you spent where and when and if there's fraud, it's not going to empty my current account. It woudl be daft not to. Yes, I do pay the balance off every single month.

Share this post


Link to post
Share on other sites

http://www.pbs.org/wgbh/pages/frontline/sh...edit/view/#rest

In "Secret History of the Credit Card," FRONTLINE® and The New York Times join forces to investigate an industry few Americans fully understand. In this one-hour report, correspondent Lowell Bergman uncovers the techniques used by the industry to earn record profits and get consumers to take on more debt.

Share this post


Link to post
Share on other sites
Guest Guy_Montag

In all fairness, I'd be included in this stat. I pay for the vast majority of stuff on CC. On the other hand, I settle the CC bill in full every month. How many of the above are doing that?

But you, presumably, have not just started buying the vast majority of your stuff on CC. It's the change that's important - not that x% do it, it's that (x+11)% have suddenly started doing it.

Share this post


Link to post
Share on other sites

I can't find a link on their site, but on the business part of the active service is a piece about consumers use of their cc's for everyday items such as food and petrol being up by something like 11% so far this year.

Could this be a sign that more people have more going out than they do coming in? Robbing Peter to pay Paul?

Can anyone find the story?

Found this in todays Indie

http://money.independent.co.uk/personal_fi...ticle549406.ece

Whatever we buy, we put it on the card

By Esther Shaw

Published: 21 May 2006

Do you still reach into your pocket for small change when you're buying a loaf of bread at the bakery?

If so, you could soon be in a minority, because more and more people are now paying for their groceries, and other small-scale purchases, with a credit card.

Over half of all spending on credit cards in Britain can now be attributed to everyday purchases, says a report from the Morgan Stanley Card Index - suggesting that traditional payment methods are coming under assault at all levels..................

TLM

Share this post


Link to post
Share on other sites

But you, presumably, have not just started buying the vast majority of your stuff on CC. It's the change that's important - not that x% do it, it's that (x+11)% have suddenly started doing it.

The increase is quite simple down to chip and pin. There is a large portion of the population for whom writing their own name is an insurmountable challenge.

With the advent of chip and pin, they can spend spend spend like never before.

I am personally worried that pin numbers will replace signatures and these folks will provide a shot in the arm for HPI as they can enter contracts at the touch of a button.

(The above is a joke)

NDL

PS. I've just thought, since when could you enter a contract without "signing up"? Do you think if you went on a spending spree with chip and pin, and then refused to pay as you never signed anything to enter a valid contract, they could do anything about it?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.