More than 7.5 million Brits prefer to use their credit cards for day-to-day purchases over cash, according to Sainsbury’s Bank.

The supermarket lender found that £3.64bn is spent on their cards every month. The average monthly spending figure for a typical everyday credit card user is £483, but some 1.41 million everyday card users regularly put £750 or more of their overall monthly expenditure on their credit card.

There is nothing wrong with using unsecured debt if it is regularly paid off, every month - in fact it helps your credit score. The problem comes if something goes wrong - a sharp reduction in earnings, for example - means a credit card goes unpaid and unsecured debt begins to rise.

Donald MacLeod, head of Cards at Sainsbury's said: "Although we'd never advocate people using their credit cards for everyday inexpensive purchases if they are likely to incur interest, we've identified a number of people who clearly like to use their credit card in the same way as they would cash or debit cards and who pay off their balances each month.”

If you handle your credit card each month, reassess your finances and predict what could happen if you were unable to pay off your card. How much would you have to pay in interest? What are the implications of a missed payment? How much more would you rely on the card as time goes on?

We never like to think of the worst, but anything can happen during this tough time. Talk to your financial adviser and see what they can do to help you plan for any eventuality.

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

Britons are still waiting far too long to get help with their debts, according to new research from a debt specialist.

Research by Payplan has found on over 100,000 customers has revealed that they are short by a monthly average of £693 on their household expenditure when they seek assistance for their debts.

John Fairhurst, managing director of Payplan, says: “We strongly urge people to get advice on their options as soon as they feel they have a problem. You might be scared to tell your creditors that you are having difficulties, but you shouldn’t be afraid to tell an independent source.

“Prior to the credit crunch, if Britons couldn’t afford their repayments they would often borrow further to pay them off, which clearly just made their situation even worse. Now we are seeing is an increase in calls as people realise that they simply cannot borrow more money.”

Payplan found that Britons wait until they owe more than 50% of their income to creditors before seeking help, and the average unsecured monthly debt repayment is £901.

These statistics just spell out the obvious - without professional advice, debts will get worse. They do not go away, they just keep building up until they get the better of you. But there are options - remortgages, secured loans, IVAs, and mortgage modifications. Of course, the only way to unlock these options is to talk to an adviser as soon as possible.

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

Critical illness cover and payment protection is going to be crucial in the credit crunch with unemployment rising, but not enough Brits know about payment protection.

If you have a secured loan, a mortgage and other financial responsibilities, you need to safeguard your finances and improve your knowledge of life insurance policies such as income protection and critical illness cover.

As the affects of the credit crunch deepen and with recession likely to take hold, protection could prove vital if a person finds they are unable to work due to illness or unexpected redundancy. It could be the difference between surviving the crunch or becoming repossessed.

So talk to your mortgage adviser about taking out some protection. But, you ask, how can you afford protection when you are struggling to keep your head above water in this difficult period? The question you should be asking yourself is how can you not afford it? Most Brits, particularly those with multiple secured debts, would not be able to survive for more than a few months if they were ill, incapacitated or made redundant.

Think about it – if you were not earning money for a long period could you make ends meet? It might happen, and everything is less sure as we face up to a lean 2009.

A mortgage adviser will be able to help you put a plan together that will make sure you can afford the cover, and your current responsibilities. Many people will face repossession next year – up to 75,000 according to the Council of Mortgage Lenders – so take on some protection and avoid being one of those statistics.

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

The Government has been criticised for just cutting interest rates and not thinking about those who are already burdened with unsecured debt.

According to fool.co.uk, six out of ten people say another cut in rates will not help. They are already in debt, and their mortgage and their loans may not be affected by any changes to the base rate.

David Kuo, Head of Personal Finance at Fool.co.uk, says: "The 1% cut in rates has brought the cost of borrowing down to levels not seen since World War II. However, it is unclear whom the rate cuts are supposed to benefit - it won't assist with credit-card and store-card debts.”

It may not. But there is no point waiting to be rescued if you are over-burdened with unsecured debt. There are trillions of pounds of debt owed by Brits, and the Government cannot pay that all off, however good they are.

The only person who can really help you is yourself. You have the ability to use your home’s equity and you are the one who can plan your finances so as to limit debt and start paying off your responsibilities. You are also the one who can pick up the phone and talk to your mortgage adviser.

The base rate might not affect you, but a mortgage adviser can. They can point you in the right direction and help lift some of the burden off your shoulders. It might not be easy and it might take time, but it is better than waiting for a solution to come riding round the corner.

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

Even though many are finding that secured loans are severely limited these days, unsecured debt is still luring people into trouble.

Sara-Ann Burgess, director at Burgesses PPI specialists, says many firms are preying on consumers looking for credit and making it very difficult for them to meet repayments because of the huge interest rates they were charging.

“A lot of people think that credit has simply dried up, but this is not the case. Many firms are still lending money, but as competition in the personal loan market has evaporated, the less scrupulous and more expensive providers have begun to gain a foothold,” said Burgess.

According to Burgess, a lot of firms were advertising to consumers and offering them access to fast, easy credit without the need for a credit score.

It might be easier to take the simple route of signing up for yet another credit card, but easy isn’t always best. Credit cards will only make your credit score worse and will only leave you with more unmanageable debt in the long run.

If you need funding, talk to an adviser. Secured debt like second-charge loans and mortgages are hard to come by, but they are worth the work and the effort. A secured loan can actively improve your credit score, while giving you some much-needed finance.

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

More and more kids are helping out their parents with rising bills during these tough times.

Engage Mutual has found that more than four out of 10 kids have helped support their parents financially in the last six months, mostly thanks to uncontrollable bills.

A spokesperson for Engage Mutual Assurance says: "As financial pressures grow, family generations are increasingly turning to each other for support in making ends meet. Our research has shown that many young Britons are sharing the burden.”

If you are struggling with the bills and with debts, and you do not want your kids to help you, maybe you should look to the equity in your home. You have been paying your mortgage diligently when times are good, so why not use some of that hard-earned equity when times are bad?

Kids helping might be a short-term answer, and it’s really good of them to help, but usually these situations need long-term solutions. A secured loan is certainly for the long-term – it can be used to consolidate debt and makes sure it will not come back.

It will also mean that you can finally get on top of your finances and not have to ask your kids for help. You are the parent and you like to do things for them, not the other way round. If you unlock some of your equity then you will be able to turn your financial life around and maybe be in a position to give back to the ones you love the most.

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

The Government yesterday pledged a 60-day reprieve for all those facing unsecured credit card arrears.

It called on credit card companies to cut interest rates and to establish a new 'statement of best practice'. Ministers says they want to ensure the 1.5 per cent base rate cut announced by the Bank of England earlier this month is reflected in interest rates on credit cards.

Brad King, managing director of Compareandsave.com says: “With the current economic climate, individuals need to be thinking responsibly about their borrowing and how and when they plan to pay back the debt. That said, there is some practical advice which can help consumers get the best possible deal for their situation.”

If you are facing unsecured debt issues, the 60 days will give you time to explore all your options. Credit card must be extinguished as soon as possible - the high rates and high risk make them a credit score nightmare.

One option is secured finance. Using your home’s equity to consolidate debt is the best way of ridding yourself of the unhelpful credit card debt and allowing you a lower-cost loan that won’t break he bank every month.

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

The Government has vowed to get tough on unsecured debt as it calls the credit card firms to heel.

Both the secretary of state for business Peter Mandelson and consumer affairs minister Gareth Thomas have called the credit card industry forward to make sure unsecured borrowers are not getting an unfair deal when it comes to credit card rates.

Sean Gardner, director, MoneyExpert.com, says: "The credit card market seems to have been operating on a different planet as far as rates are concerned for some time now and given the recession worries it's no surprise the Government has taken this step.”

Moneyexpert,com has found that the average typical APR for credit cards in November 2007 was 16.8%, when Base rate was at 5.75%. But now, when Base rate is at just 3% SVR averages are up to 17.59%.

Gardner adds: "Despite a considerable drop in the Bank of England's rate over the last 12 months the average APR on cards has gone up by over half a percent; pretty galling for borrowers already paying interest way above base rate.

"With providers now increasingly pulling 0% balance transfer deals there's a real worry that the wheels could fall off for those stuck with credit card debt. Hopefully, though, this Government move will signal a more realistic approach to lending and ultimately a better deal for consumers."

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

Borrowers who feel tempted to ignore serious financial difficulties until after Christmas will be putting off the inevitable and find themselves deeper in debt in the New Year – the need for consolidation couldn’t be more apparent.

IVA.com received nearly as many enquiries from worried borrowers in October as last January – which is renowned for being by far the busiest month of the year for debt advice – indicating that this New Year is likely to see even more people asking for help than ever before.

Terry Balfour of IVA.com says: “As the nation contemplates a less extravagant Christmas, many people whose debts have got out of hand are in real hardship – and that’s something that is very difficult to face up to at this time of year.”

IVA.com is right – it is tough to face it if you have debts, but it is crucial not to let them get the better of you. And a secured loan can make sure that doesn’t happen. A secured loan can help cancel and consolidate debts into one loan, making your life easier and making the debt problems a thing of the past.

Of course this option is not for everyone with debts – but what is or everyone is some good, professional financial advice. Whatever your situation, if you need a secured loan or not, get a financial check up from an adviser.

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

The Chancellor Alistair Darling has revealed plans to make sure that the Government will help secured loan borrowers in difficulties.

In his pre-Budget report he said: “In September we set up a Mortgage Rescue Scheme, helping vulnerable homeowners facing difficulties stay in their homes. Today I am extending this scheme, so it will also cover those at greater risk as a result of taking out second mortgages.”

This means those who are in difficulty, and have stretched themselves too far as a result of taking out a secured loan will be allowed to take part in the Mortgage Rescue scheme, where the Government buys up the distressed home and then rents it back to the borrower.

Darling also extended the Support for Mortgage Interest scheme, which covers mortgage interest payments for those who have lost their jobs. He said he would increase the upper limit of the scheme, for mortgages up to £200,000, from the present limit of £100,000.

This means if you are made unemployed and have a mortgage as much as £200,000 the Government will help you with the interest payments for your mortgage until you get back on your feet.

“This will help ease worries for homeowners who have lost their jobs as they look for new employment,” said Darling.

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