If you used your credit card today did you ask yourself if you could really afford what you bought? If the answer is no then you need to start thinking about a life without plastic.

For many years people have been ‘putting it off by putting it on the card’. They have been living for today, hoping to pay for it tomorrow. Well now, in this new post-credit crunch world, it is tomorrow and it’s time to begin paying back your unsecured debts.

Because there are no more chances for those who spend beyond their means. The world almost came to a standstill thanks in part to people spending more and more on their credit cards, on loans and on store cards. They remortgaged, took out secured debts and carried on. But house prices have bottomed out and lenders are now saying no to refinance. The party has ended and people have to begin to look at ways to pay off their debts, safely and with the long-term in mind.

This starts by getting some professional help. Promises of quick-fix credit and adverts promising that you do not have to pay off your debts are stupid at best, criminal at worst – the only way that debt can be reduced and cleared is careful saving and sensible use of secured equity.

So talk to a Financial Services Authority regulated adviser who, by law, will only give you the correct answers. If you cannot get more credit, then they will tell you so, but they will then help you explore the alternatives.

Because there are always alternatives – there are always ways in which you can begin to wean yourself off the plastic and begin moving into the black. It might take a long time and it might not be easy, but with some professional advice it is possible.

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

The latest UK debt figures have found that the total UK personal debt at the end of March 2009 stood at £1.459 trillion, a huge debt problem, but one that is slowing down.

CreditAction, the debt charity, has calculated that debt figures have slowed further to 2.2% in the last 12 months which equates to an increase of just £28bn compared with the increase of £116bn in January 2008.

Total consumer credit lending to individuals at the end of March 2009 was £232bn. Thankfully this has also continued to fall by 3.2% in the last 12 months. CreditAction found that total lending in March 2009 grew by £0.9bn and secured lending grew by £0.8bn in the month.

But these numbers are still astronomical; the average household debt in the UK is around £9,280, excluding mortgages. Also, this figure increases to £21,580 if the average is based on the number of households who actually have some form of unsecured loan.

The only way to reduce debt is to find ways to pay it off, and that isn’t easy if you owe more than £9,000. You need to consolidate and plan a way to pay off the debt as best you can. Using your home’s equity is a great way of doing this – it turns several costly loans into one, affordable loan. This means you have time and space to clear the debt.

Debt is slowing, which shows people who do owe money are seeking ways to slowly turn the tide. But the UK isn’t out of the woods yet, it’s going to take a lot more hard work and sacrifice. But it’s worth it – if you eventually find yourself debt-free it will be the best feeling in the world.

SOURCE: CreditAction, 01/05/09

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

Millions of consumers are still reliant on credit for day-to-day living costs in 2009 according to the Post Office.

The survey reveals over 10 million adults intend to use their credit card in the first part of the year for daily purchases such as grocery shopping.

It also found that 2.6 million people intend to spend even more on their credit cards than last year, with an average spend in January of £318. Worryingly, the trend looks set to continue, with 4.1 million card holders planning to spend less on each purchase but use their cards more frequently for general living costs throughout the whole of 2009.

With almost half of all credit card holders not planning to pay off their credit card bills in full each month, it might be time to reconsider whether using unsecured debt is the best strategy.
Az Alibhai head of lending at the Post Office says: “In the current climate, many people have little choice but to rely on their credit cards to fund more expensive purchases. However, what is worrying, is the trend for people to continue to rely on their cards for basic day-to-day purchases, which could be expensive if you only pay off the minimum amount on your credit card each month and have a high rate of interest.”

If you are living by plastic, it’s time to think again. The more that is amassed on a credit card, the greater the risk of missing rising payments. Talk to a financial adviser and see what you can do to change your spending and borrowing habits for the better.

SOURCE: Post Office, 04/02/09

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

More and more Christmas shoppers are turning away from credit, and instead using cash to pay for their gifts and celebrations.

According to Halifax, 71% of consumers will pay for Christmas this year out of their hard earned cash, while only over a third will use a credit card.

It also found that one in ten will use a store card and only 5% will use a loan to cover the cost of their Christmas spending. The average amount of unsecured debt this Christmas stands at £449.

Mike Regnier, Halifax head of banking says: “It’s encouraging to see that more consumers are becoming prudent with their finances this year by choosing to use their savings, monthly income and cash to pay for their Christmas purchases, rather than opting for costly store cards which could see them paying out more in the long run.”

It’s great news – more people are shying from dangerous, expensive unsecured debt to cover their spending. If you think you need unsecured debt to cover costs, think again. There is nothing worse than unsecured debt to get you further in financial difficulty.

Those who do choose to stack up plastic will only regret it – having to remortgage, use your home’s equity or even face repossession is something no one chooses to do. Thinking that ‘spend now, pay later’ is still a good strategy could be financial suicide as the UK goes into a recession.

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