Thursday, 19 October 2017 16:16

    Clampdown expected on borrowing as more and more people use the plastic.

    Despite warning upon warning, Britons are still heaping all their debt onto credit and store cards and all the while are getting themselves into a financial situation that many find difficult to get out of.

    Because of this, many regulators are looking at putting new restrictions in place that will make it difficult for consumer borrowing to exceed the heights it is at today. The rate of spending on plastic boosted the economy last year but in the long term it is expected to do more harm than good to the country’s coffers – and we are already starting to see shops reporting falls in profits as the squeeze starts to bite people on the behind.

    It isn’t just materialistic shopping on credit cards that is proving to be a problem either. Car finance is on the up as are applications for payday loans. When looking into the latter, research has shown that many people are applying for payday loans because they need help to pay credit card bills (how ironic is that?!) and unexpected household bills.

    According to some of the biggest credit card companies, consumers seem to be spending o the plastic with no thought for any consequences and NewDay, which owns many credit card brands as well as offering store cards for some of the high street’s biggest names such as House of Fraser and Topshop, claimed that lending grew to well over 30 per cent last year. In that figure, there were over 900,000 people newly into borrowing.

    We don’t know how many times we have to say it. This very kind of borrowing behaviour and spending without any thought for long term consequences was part of the reason for the financial crash that we experienced not so long ago. People have very short memories.

    We seem to be in an age where we think it is OK to spend money that we haven’t got, in the knowledge that someone will bail us out - whether that be another loan to cover repayments on an existing loan, or someone in the family.

    More responsibility needs to be taken.

    Sure, if you want to pay for something on the plastic, go for it, but always ensure that you have the means to pay for it when the bill comes through. It isn’t unreasonable.

    Because of the way things are heading, regulators are now looking to change a few rules and are looking to get stricter on consumer borrowing and some charges that accompany these.

    QuickQuid, one of the country’s biggest lenders, said it too had seen a near 17 per cent increase in borrowing in the first three months in comparison to twelve months ago.

    Authorised and regulated by the Financial Conduct Authority 763132

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