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  Listed Article

  Category: Articles » Finance » Article
 

Inflexible friends and plastic assets, why money isn't buying love anymore




By Rachel Lane

Consumers reject financial advice in favour of financial frivolity

It would appear that even though their “friends” aren’t as flexible as they used to be, consumers are still stretching their credit cards beyond the comfort zone.

The vicious circle of debt manipulation involving banks, consumers and commercial credit companies is putting consumer spending under strain, as funds begin to dry up. In May 2005, the Financial Times reported the accusation that banks were fuelling Britain’s personal debt problem by repeatedly offering debt-ridden customers loans they were unable to repay.

As the UK’s personal debt increases by £1 million every four minutes, credit card spending habits still seem to be spiralling out of control. According to Credit Action, nearly 66% of the adult population have a credit card, with multiple card holding becoming a growing phenomenon in the UK. More than 60% of card holders possess at least two cards, with 10% holding at least five cards. There has also been a significant rise in the number of personal bankruptcies. In the year up to March 2005, 37,886 people were made bankrupt, a 30% increase on the previous year.

Credit Action reported that some credit card companies reduced their minimum repayments from 3% to 2% last month, which has been seen by some as irresponsible. To put this into perspective, a £3000 credit card balance at 17.9% APR would now take more than 40 years to repay if the minimum repayment of 2% is paid each month, in comparison to 19 years with the 3% minimum repayment. Barclays even warned of falling profits for the Barclaycard credit card division last month, as more customers missed repayments and bad debtors increased.

For those consumers with regular incomes and strong credit records, credit cards with APRs as low as 6.9% are available, that’s less than half the standard APR most consumers have to pay on the cards in their wallet. By just using a variety of online personal finance tools, consumers can save themselves considerable grief by undertaking some financial homework.

In the UK, a variety of sites are available to compare credit cards, loans, life insurance, car insurance, mortgages, savings accounts, Child Trust Funds and current accounts. With just a few clicks of the mouse, a trusty search engine and a clear definition of the relevant search terms, such as “credit card guide” or “loans guide”, the consumer can have swift access to a number of useful research sites including moneynet.co.uk, moneyfacts, moneyextra and uSwitch. These companies are specially set up to provide impartial consumer information and by using them for personal finance research, the consumer could effectively save thousands of pounds by choosing the most appropriate credit card, loan and mortgage accounts, not to mention securing good deals on car insurance, life insurance, travel insurance and household insurance.

For further information on the companies included in this article:

http://www.moneynet.co.uk/

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

http://www.parentspenniespounds.co.uk/

http://www.moneysavingexpert.com/
 
 
About the Author
Rachel writes for the personal finance blog Cashzilla.

http://www.cashzilla.co.uk/

Cashzilla is a psychological, technological manifestation of the financial pressure Rachel faced when she graduated from her very expensive, much extended degree.

Rachel uses Cashzilla as online therapy and frequently expresses her views on finance related issues, whether they’re societal, personal or nonsensical.

Article Source: http://www.simplysearch4it.com/article/4132.html
 
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  Some other articles by Rachel Lane
Why a little bit of marketing does you good, especially at Christmas
My grandpa, who's a Quaker, used to disapprove of the fact that I ventured into marketing, but he's coming round to my way of thinking, even ...

Store cards, credit cards and loans - how to borrow money effectively.
You don't have to have the lifestyle demands of Paris Hilton to need extra money these days. According to Credit Action, the total UK personal debt was 1,122 billion, a growth of about ...

The myth of the Christmas loan
If you think Harry Potter was going to be the most imaginative marketing plot this Christmas, think again. Each Christmas as consumers look at their finances and investigate the different sources of funding to cover ...

Home A Loan
The number of homeowners taking out secured loans is set to slow down over the next five years according to analysts at Datamonitor. Over the past five years the market for secured ...

Don't let your personal loan become a personal moan
Most of us have been in a position at some point when we simply have had insufficient funds to pay for something. This could be car insurance/repairs, course fees, holiday, Christmas presents, electrical items or ...

Inside insurance - protection priorities
Protecting your home Although you have no legal obligation to insure your home, your mortgage company will want to protect their investment ...

  
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