The problem is 'personal pricing' in the credit card market is making it very difficult for large numbers of consumers to prejudge what rate they will be offered according to Defaqto.

The company says many credit card providers now use ‘personal pricing' where the interest rate charged is based on that individual's details, credit record and repayment history. For those who are actually offered a credit card typically two thirds will get the best rate and up to one third will get offered a higher rate.

It's those one-third who need to stop using unsecured debt as a means to get by right away. Those higher rates prejudged on credit score will only lead those people further down into more debts, exacerbating their problems.

David Black, banking specialist at Defaqto says: "It always used to be fairly straightforward to get a credit card but providers have become increasingly choosy about who they will lend to and, if they will lend, at what rate. Many consumers don't even get to that stage because the number of credit card applications being rejected has shot up."

If you are applying all over the place for expensive credit so as to pay the bills or just get through the month, stop. Talk to a professional adviser about consolidating your debts into one easy payment. It is possible to say no to unsecured debt, but only with the help of some trustworthy, sensible financial help.

SOURCE: Defaqto, 21/04/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

There are a world of websites out there for those who are indebted – information services, debt management websites, Government help, charities and of course professional financial advisers.

And people are starting to see the benefit of seeking out help online – 150,000 people used the Consumer Credit Counselling Service's online support, many of whom were under 40. The figures also found that more women than men use CCCS Debt Remedy which could be evidence that women are more open with their problems and more keen to get to grips with them.

Paula Searle, head of e-services at CCCS says: "The higher rates of online debt counselling users in any particular category is likely to be a combination of need for help with their debts and general internet usage."

Good advisers like The Mortgage Broker pack their websites with information – they understand that people want to do all they can on their own terms to understand their debt problems and work out ways in which they can make life easier for themselves. Only then, when they have their own tools should they seek out some help to take that next step towards managing and reducing their secured debts.

SOURCE: CCCS, 09/04/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

The latest Bank of England figures showed that borrowers owed a combined £61.5bn to credit card companies in January. That's an increase of £300m in just a month.

But how can you get out of the cycle? Every month the repayment rate is high, your other debts and responsibilities do not go away and there is never enough money to begin really getting on top of the credit cards.

That's why you need to consider a secured loan if you are struggling to handle the credit card debt. By consolidating the debt onto your mortgage you exchange double-digit rates for single digit rates, and you take the pressure off the rest of your finances. That allows you to pay down any other debts you may have and gives you space to save money for the long term.

A spokesperson for debt management company Gregory Pennington said: "Credit card debt is a growing problem for many people, and it`s vital that anyone struggling to repay their debts seeks independent debt advice."

SOURCE: Gregory Pennington, BoE, 05/03/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

There are still many people entering into retirement with hefty credit card debt – in fact, one in five over-65’s owe money on their credit cards with average debt of £8,967, says Key Retirement Solutions.

Its analysis shows that pensioners making the monthly minimum repayment on a balance of £8,967 at an average 18.8% rate would pay £141 out of average gross pensioner incomes of £16,000. That equates to 10% of monthly income before tax – but someone only paying the minimum would take 30 years and one month to clear the debt without spending any more on the card.

But using some of your home's equity could cancel out that debt and save you a fortune in your retirement. And there more than enough equity to do this – KRS says the over-65s have property wealth of around £765.2bn after paying off mortgages and gaining from increases in house prices.

Dean Mirfin, business development director at KRS, says: “Debt is a way of life for a substantial number of people and the over-65s are not immune. Many are perfectly comfortable with owing money on their credit cards and it can be a sensible way of planning for major purchases.

“Many of them do though have substantial wealth tied up in their homes which represents a potential source of income particularly when other sources of retirement income are under pressure from low interest rates and annuity rates.”

SOURCE: KRS, 16/03/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

Car loans, personal loans, mortgages, credit cards and store cards on top of all of the other bills life throws you mean you do not have much money to actually save and pay off the debt – many Brits are therefore doomed to a life of continuing debt.

If you can manage the demands each month this isn't necessarily a problem, but if you suffer a loss of earnings or are hit by an unexpected payment then you may find you miss a payment on one of your debts and then you could be in real trouble. One missed payment means a fine, a penalty charge or an increase of a rate – then all your debts are at risk as your outgoings suddenly increase.

The only way to solve the problem is to get some space and time to be able to save money and actually work off your debts. That can only be done by consolidating your debts into one, affordable loan – a secured loan.

By using your home's equity to consolidate debts you reduce the number of interest rates you have to service considerably – and because the one debt is secure, that rate is lower. So from many high rate payments to one, low payment means you have room to save and pay down the secured loan in good time and you reduce the chance of losing control of your finances.

So if you feel like your debts don't give you room to breathe, talk to a mortgage adviser about using your home to give yourself some freedom.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

A survey by insolvency practitioners R3 shows that 66% of those who deal with bankruptcies and insolvencies have dealt with cases where people have signed up for a store card without understanding what they had let themselves in for – nearly 80% of insolvency practitioners believe that consumers view spending on store cards as less ‘real' than spending in cash and so unwittingly go over budget.

Unsecured debt like store cards is bad for so many reasons. It was designed to make people spend way beyond their means, it doesn't often show the real rate of repayment people will be saddled with after a spending spree, and it only adds to a person's negative credit score – the more unsecured debt someone amasses the less chance they have of securing good debt like a mortgage in the future.

Peter Sargent, president of R3 says: "Offering store credit at the point of sale means that many vulnerable consumers do not grasp that they are entering into a legally binding contract. Store cards must be handled just like any other credit card. This advice guide was designed to make consumers stop and think. We can't stop people from using store cards but we can show them how to make sure the store card works for them."

If your store cards are too much for you, talk to a professional mortgage adviser about moving your risky debt onto your mortgage. By consolidating debt you may find that your outgoings shrink, your worries diminish and you have the chance to finally pay off debt instead of massing it.

SOURCE: R3, 23/02/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

That is the equivalent of one day's wages a week going towards servicing debts – for many this is just too much. It's hard enough to cover the interest payments let alone work towards paying the debt off. Unbiased says figures show that credit card debt has increased by just over £4bn in 2009, reached over £54bn because people just can't pay it off.

For some people the answer may lie in secured consolidation. By using your home to pay off your unsecured debts you are able to reduce all your outgoings to just the one payment. This means less outgoings from one month to the next and more importantly it means the borrower has time and space to pay off their debt, not just manage it.

Karen Barrett, chief executive of Unbiased.co.uk says: "Debts can quickly mount up to a considerable sum and this date demonstrates that debt is something that we need to take control of and actively manage.

"Tackling your debt doesn't have to be a daunting task and you don't have to do it on your own. With interest rates at an all time low, now is a better time than ever to action. Seeking independent financial advice will make sure you are making the right choices on your finances."

SOURCE: Unbiased.co.uk, 19/02/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

Research from moneysupermarket.com has discovered the depth of reliance Brits have on unsecured debts – the research found that one in five of us carry more than three credit cards and that 17% of credit card holders use their card at least once a day.

The research also discovered a worrying trend in that over 14 million Brits are using their credit cards to fund day to day expenses. People have still not learned that unsecured debt is a short-term solution and is not the answer if you cannot afford something.

Peter Harrison, credit cards expert at moneysupermarket.com, says: "Credit cards are still playing an important role in the nation's finances. Our research makes clear the extent to which many of us rely on credit cards at frequent intervals in our lives although it's alarming to see that so many people are using credit to pay for day to day expenses as this can be a dangerous habit to get into.

"Also, holding more than two cards does expose you to a large amount of credit, which may not be financially healthy and could make it difficult to obtain further credit in the future."

If you are relying on unsecured debt to get by day-to-day then you need to seek out some expert help. Talk to a mortgage adviser about restructuring your debt and using safer secured options to get by. Credit cards will only lead to more debt pain and will only result in not being able to afford more, for longer.

SOURCE: Moneysupermarket.com, 15/02/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

Traditionally, many cardholders transfer balance to a new 0% balance transfer card. However in the current market, many people are finding it increasingly difficult to access new deals, with only four out of ten applications being accepted, according to moneysupermarket.com.

So if you can't move the debt it's time to handle the debt. The first thing to do is to check your credit rating – make sure you have a good credit rating before doing anything. If you have a bad rating you will be limited in what you can access, credit-wise, and you may have to come up with another plan to clear your debts.

Realistically plan your budget for repaying your debts – If you are looking to switch a debt to a zero per cent deal, then aim to pay off this debt before the balance transfer period ends. First make sure you can afford the monthly repayments to clear the debt and then come up with a sensible plan of action over the year.

If you are unable to find a new card deal, consider a secured loan. A loan will allow you to move all your debts onto your mortgage, giving you a smaller repayment over a longer period. This is a perfect option for those looking for room to save and to move back into the black over the long term.

If you are unable to move your debt, then aim to pay off the balance as quickly as possible. Paying off £150 a month on a £3,000 balance on a card with an average rate of 18.31% would take just two years.

Peter Harrison, credit card expert at moneysupermarket.com, says: "It is extremely difficult to switch cards at the moment so you need to be savvy about tackling your existing debts. The best approach largely depends on your credit rating and how much you are able to repay every month. Careful planning is required to ensure credit card debts are cleared in the most efficient way possible."

SOURCE: Moneysupermarket.com, 12/01/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog

Figures released by the Bank of England have shown that in November, borrowers repaid £376m of unsecured debt and while that was £215m less than the total repaid in October, it's good to see that people are trying to pay off unsecured debt rather than amass it.

Howard Archer, chief UK and Eurozone economist at IHS Global Insight, says: "The fifth successive net repayment in consumer credit in November is clearly the consequence of many consumers` desire to reduce their debt. It is yet another example of consumers looking to improve their financial situations in the current difficult and worrying economic environment."

If you have unsecured debt problems, lenders cannot trust you to be able to pay off secured debt. In their eyes they see someone who has taken short-term solutions instead of thinking carefully and saving instead of borrowing. Too much credit card debt, store cards and personal loans points to a borrower who may not be able to deal with a bigger, long-term loan.

Talk to a financial professional about working off your unsecured debt, either through sensible budgeting or through secured debt consolidation to allow you to become a better potential borrower. The person who has worked off debt, budgeted wisely and has listened to sage advice is the person who will be accepted for future secured loans and mortgages.

SOURCE: IHS, BoE, 07/01/10

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog