As if leaving the weekend behind and making the commute to work on a rainy day wasn’t enough, a report in The Telegraph is now telling us that an average household will need to earn an extra £1,800 a year by 2015 to be able to pay for the interest on their credit cards.
Although the typical household reduced its borrowing by £500 few years back, most households still owe around £8,000 on credit cards and loans. Considering the increases on things such as VAT and petrol prices that we already have to cope with as a nation, I’m sure an increase in interest rates on credit cards and loans by around 2 or 3 % in the next four years, is not the type of news that we were hoping for to bring us into the New Year.
Things also don’t seem to be looking up on the other interest rates front, as it seems that the Bank of England will be forced to start increasing them in the first half of this year. This increase, earlier than first thought, would not only hit the 30 million credit card users in Britain but also the eight million home owners on variable rate mortgages.
We are also warned that consumers who wanted to take on new borrowing were likely to find it increasingly difficult to do so. This means that a lot more people are probably going to find themselves turned down by high street lenders, forcing them to borrow money in other ways.
These ‘other ways’ that are referred to, are things such as payday loans. Loans like these have been increasingly popular, with £1.2 billion lent out in 2009. Although a lot of people can fall all too easily into spiraling debt, payday loans can offer a great alternative in solving short term cash flow problems.
We encourage visitors to only borrow amounts that they will be able to pay back. They offer a real solution to the thousands of people who have short term cash problems and provided that they have the money ready in their accounts to repay the funds quickly instead of getting themselves into debt, they should be able to benefit from the instant cash sums that they offer!