interestrateripoff Posted October 31, 2008 Share Posted October 31, 2008 http://www.telegraph.co.uk/finance/persona...to-plastic.html The amount outstanding on credit cards has climbed by £1.1 billion to £55.7 billion, according to the Bank of England, bringing total unsecured consumer credit – cards and loans – to a record high of £238 billion in September. This was up from £237 billion in August, according to the Bank of England.Experts said they were concerned that the increase in credit cards could be a sign that struggling homeowners were attempting to pay off their mortgages by using plastic, a potentially very expensive method of paying off their home loans. The figures came on the same day as a survey showed that 24 per cent of consumers were still paying off debts from last Christmas – a distinct deterioration compared to the 17 per cent, who said they were in the same position a year ago. Richard Thompson, a partner at PricewaterhouseCoopers, said: "It is clearly a concern if consumers are living beyond their means. There are segments of consumers doing this. "We call it the credit waterfall effect, which is when people who are faced with rising mortgage costs and lower incomes resort to short-term credit to maintain their standard of living." The Christmas debt survey, from the personal finance website Savebuckets.com, suggested that the rising debt levels of consumers could make life increasingly difficult for Britain's shopkeepers, if customers continue to tighten their belts. James Wenger at the website said: "With a rising number of Brits still paying for last Christmas it raises alarm bells over how the pattern will continue next year into 2009 as the economic turmoil continues." The Bank of England data showed how dangerous it was for consumers to rely on their credit cards. The average rate charged by credit card providers climbed from 17.54 per cent in August to 17.7 per cent in September. Though the data was collected before the Bank of England's shock rate cut from 5 per cent to 4.5 per cent, it would appear that credit card providers have ignored the previous three rate cuts over the last year, and increased their rates. The shrinking mortgage market was also highlighted by the Bank, when it disclosed that the amount people were repaying on their mortgages outstripped the amount of money lent by banks in August. The Bank said this was the first time consumers ever paid back more than was lent, paying back £700 million, though the data also showed there was a modest improvement in September when £2.2 billion was lent. Howard Archer, an economist at Global Insight, said: "Despite the very limited improvement from August, the Bank of England mortgage data for September still showed that housing market activity continued to be decimated by the highly damaging combination of stretched buyer affordability and tight lending practices." He added: "There is also likely to be higher distressed borrowing over the coming months, as people struggle in the face of high food prices and utility bills, and rising unemployment." Separate research also showed that borrowers are being further squeezed by banks and building societies increasing their interest charges on authorized overdrafts. Desperate stupid people. If you haven't got the money stop spending it's easy. When is this unsustainable borrowing going to come crashing down? Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted October 31, 2008 Share Posted October 31, 2008 We need interest rate cuts so that the screw can be turned more. Credit card rates of up to 227% are simply not enough. The banks should be parcelled gobs of cash at or near zero rates as possible backstopped by the taxpayer so that they can get the public so hopelessly in debt that more people people are forced into the upper bands. Watch the bank bonuses, it will amaze and disgust in equal measure. The jobs will still go abroad as nearly every other developed nation in the world is still a cheaper location to carry out business. Quote Link to comment Share on other sites More sharing options...
Qetesuesi Posted October 31, 2008 Share Posted October 31, 2008 http://www.telegraph.co.uk/finance/persona...to-plastic.htmlDesperate stupid people. If you haven't got the money stop spending it's easy. When is this unsustainable borrowing going to come crashing down? No, I'm afraid it's not easy, 'cos they're addicted. End of. And no surprise either. A society (esp. the NL govt.) that legitimises and even legally privileges and subsidises certain addictions has no right to wash its hands when millions fall into others. Quote Link to comment Share on other sites More sharing options...
Guest KingCharles1st Posted October 31, 2008 Share Posted October 31, 2008 Extremely fortunately for him, a good friend of mine has just walked back into a 50K a year job, a specialist niche numbers analysis thingy. Prior to that he had to put his last three months mortgage on a card... scary stuff- how many out there like him? Quote Link to comment Share on other sites More sharing options...
ken_ichikawa Posted October 31, 2008 Share Posted October 31, 2008 Its not all stupidity you know , almost all my house hold bills go on the plastic and get paid off way before the due date , namely as the card companies are evil and send you the statements after the due payment date has passed, got stung for 75p of interest the other day... As I get a tiny amount of cash back on what I pay on the card. Quote Link to comment Share on other sites More sharing options...
dryrot Posted October 31, 2008 Share Posted October 31, 2008 (edited) Its not all stupidity you know , almost all my house hold bills go on the plastic and get paid off way before the due date , namely as the card companies are evil and send you the statements after the due payment date has passed, got stung for 75p of interest the other day...As I get a tiny amount of cash back on what I pay on the card. As me: my CC gives me 1% back - occasionally 2% if they have an offer. And the usual 4 weeks interest-free before paying in full. But can one really pay mortgages by CC and get the interest-free credit and cashback? I'd love the 1% then! But I fear this thread refers to people who borrow cash on the CC to pay the mortgage, and that way madness lies as you pay (CC rates of!) interest from the day the cash leaves... EDIT: SP Edited October 31, 2008 by dryrot Quote Link to comment Share on other sites More sharing options...
Converted Lurker Posted October 31, 2008 Share Posted October 31, 2008 credit card debt is one of the issues sadly not discussed in more detail, huge amount of toxicity, not as much as MBS but nevertheless the losses could be catastrophic given the complete write offs, as opposed to 30-50% off property values... Quote Link to comment Share on other sites More sharing options...
PopGun Posted October 31, 2008 Share Posted October 31, 2008 Looks like our preditions of the mass XMAS credit binge before the new year banckruptcy application is underway! Quote Link to comment Share on other sites More sharing options...
jsync Posted October 31, 2008 Share Posted October 31, 2008 As me: my CC gives me 1% back - occasionally 2% if they have an offer. And the usual 4 weeks interest-free before paying in full. But can one really pay mortgages by CC and get the interest-free credit and cashback? I'd love the 1% then! Hi, which CC is that? Thanks Quote Link to comment Share on other sites More sharing options...
lulu Posted October 31, 2008 Share Posted October 31, 2008 http://www.telegraph.co.uk/finance/persona...to-plastic.htmlDesperate stupid people. If you haven't got the money stop spending it's easy. When is this unsustainable borrowing going to come crashing down? Sorry, some of that increase is probably down to me buying some theatre tickets over the internet recently, I hardly use my credit card but now there is £120 owed on it I had better pay it back soon that will make the figures look a bit better Quote Link to comment Share on other sites More sharing options...
the primitive Posted October 31, 2008 Share Posted October 31, 2008 Its not all stupidity you know , almost all my house hold bills go on the plastic and get paid off way before the due date , namely as the card companies are evil and send you the statements after the due payment date has passed, got stung for 75p of interest the other day...As I get a tiny amount of cash back on what I pay on the card. Set up a direct debit to pay off the balance in full every month. Easy peasy. No interest ever, as long as you don't buy what you can't afford. Sadly this last bit seems to escape most people. It would be great if we could have a selective recession where tw@s in debt get burned, but people not in debt are unaffaected. Sadly this is impossible, as innocent, prudent people will lose their jobs in droves alongside everyone else. I am however optimistic that at least some people will learn some lessons, and in a perverse way the worse the recession is, the more people will learn a lesson and the better the chances of it being less bad next time. maybe. Quote Link to comment Share on other sites More sharing options...
The Knimbies who say No Posted October 31, 2008 Share Posted October 31, 2008 Some of the cc debt is without a doubt people putting mortgage payments on it, to buy a few more months. It's understandable why desperate people will do these things, and it will buy people more time, albeit at huge expense. Expect the trens of shrinking overall mortgage debt with corresponding increases in unsecured debt to continue. It is going to get pretty messy very soon. PS I must fess up to £65 quids-worth of that unsecured debt mountain-sincere apologies folks. Quote Link to comment Share on other sites More sharing options...
dryrot Posted October 31, 2008 Share Posted October 31, 2008 Hi, which CC is that?Thanks Capital One, for me. many others (but NOT of course on cash advances!) are below http://www.money.co.uk/credit-cards/cashba...redit-cards.htm Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted October 31, 2008 Author Share Posted October 31, 2008 Hi, which CC is that?Thanks I've got a BarclayCard cashback that has the same offers. Currently it's 2% on petrol and supermarket spending. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted October 31, 2008 Author Share Posted October 31, 2008 No, I'm afraid it's not easy, 'cos they're addicted. End of.And no surprise either. A society (esp. the NL govt.) that legitimises and even legally privileges and subsidises certain addictions has no right to wash its hands when millions fall into others. I wouldn't say it was an addiction more social conditioning to be good consumers. If your not buying X, Y, Z then your a failure. Quote Link to comment Share on other sites More sharing options...
cht Posted October 31, 2008 Share Posted October 31, 2008 I wouldn't say it was an addiction more social conditioning to be good consumers. If your not buying X, Y, Z then your a failure. Indeed. Over the next few years those of us without debts are going to have some advantage. Even better if you have savings Quote Link to comment Share on other sites More sharing options...
punter Posted October 31, 2008 Share Posted October 31, 2008 what happened to living within your means? Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted October 31, 2008 Author Share Posted October 31, 2008 what happened to living within your means? Debt = miracle economic growth. You clearly haven't received the appropriate education to understand this truth about debt. The more debt we have the richer we become. Quote Link to comment Share on other sites More sharing options...
lost Posted October 31, 2008 Share Posted October 31, 2008 I've been with the same Bank for 18 years, never had a credit card, what comes through the post yesterday ? Oh yes, new credit card............ Just in time for Christmas do you think ? Quote Link to comment Share on other sites More sharing options...
Austin Allegro Posted October 31, 2008 Share Posted October 31, 2008 I wouldn't say it was an addiction more social conditioning to be good consumers. No, no, no, - 'Psychological Coach' Ben Fry off TV's 'Spendaholics' told me it was because my mother didn't hug me enough when I was a child... Paying a mortgage on a CC makes me think of that scene in Wollis and Gromet when they are pulling up tracks from behind the model train and desperately trying to lay them in front while it steams ahead. Quote Link to comment Share on other sites More sharing options...
dryrot Posted October 31, 2008 Share Posted October 31, 2008 (edited) I've got a BarclayCard cashback that has the same offers. Currently it's 2% on petrol and supermarket spending. Personal Amex offer 5% for the first few months! (Capital One offered 4% last year for the first 90 days.) Often the CC issuers will remove the cashback after a year, tho in fairness CapOne hav'nt: the 1% still stands. If/when they do it'll be time to switch. (Makes you wonder what % Amex charge the vendors...) EDIT: sp Edited October 31, 2008 by dryrot Quote Link to comment Share on other sites More sharing options...
erranta Posted October 31, 2008 Share Posted October 31, 2008 As me: my CC gives me 1% back - occasionally 2% if they have an offer. The real reason why they offer these type cards is they want to track everything you are spending on. Just like the supermarket Tesco Nectar 'loyalty' cards. They share shopping/spending info with inland revenue, credit agencies, advertising/marketing agencies and any other Govt bod such as your local council tax office. You can be marked down on your credit rating just by buying 'reduced price' items when you shop - it's that bad! Buy with Cash to spite them! Quote Link to comment Share on other sites More sharing options...
WSG Posted October 31, 2008 Share Posted October 31, 2008 They share shopping/spending info with inland revenue, credit agencies, advertising/marketing agencies and any other Govt bod such as your local council tax office.You can be marked down on your credit rating just by buying 'reduced price' items when you shop - it's that bad! can you back this up with any evidence? i'm not saying it couldn't happen mind...but i'd be surprised if we were there yet. Quote Link to comment Share on other sites More sharing options...
Leonard Hatred Posted October 31, 2008 Share Posted October 31, 2008 Consumers turn to plastic, housing bubble turns to poo. What next, Brown turns to the truth? Quote Link to comment Share on other sites More sharing options...
dryrot Posted October 31, 2008 Share Posted October 31, 2008 The real reason why they offer these type cards is they want to track everything you are spending on.Just like the supermarket Tesco Nectar 'loyalty' cards. They share shopping/spending info with inland revenue, credit agencies, advertising/marketing agencies and any other Govt bod such as your local council tax office. You can be marked down on your credit rating just by buying 'reduced price' items when you shop - it's that bad! Buy with Cash to spite them! Nightmare! So I should'nt have used the CC for my subscription to "Spanking Monthly"? At least they can't findout I contribute to HPC - that's far more anti-citizen! Quote Link to comment Share on other sites More sharing options...
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