People in debt
People have always been in debt and needed debt help . There will always be borrowing and many don't consider a mortgage to be debt - but of course it is. If your property was to half in value and you had a 100% mortgage then the bank would still want their money back - and rightly so.
However, just because borrowing has become more difficult does this mean that people are no longer getting themselves into debt problems like they were a few years ago? I think not and here is why ...
I have 2 credit cards. I used to use them a lot but now I don't. They used to have a large amount owing on each but I have managed to reduce the balances massively on them both now so there is very little outstanding. So, I'm in a good position with my credit cards - I owe hardly anything on them so therefore my debt is low and I'm not paying a significant amount of interest. I'm sure I'm not alone in this situation.
Here's my point though. I can borrow up to £ 7,500 on Credit Card 1 and £ 6,000 on Credit Card 2. I'm not going to - but say I was to suddenly use all this money and treat myself. I would then owe £ 13,500 and with a minimum payment of 3% a month I'd be paying £ 405 a month - with the majority being interest. Now let's say I now lose my job, let's be honest, many are at the moment. I'd be absolutely stuck and be seeking debt advice urgently - which could lead to needing a debt management plan.
Article Source: Messaggiamo.Com
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