Debt on your doorstep

Although banks are, in theory, clamping down on the amount of credit applications they approve, in actual fact they are doing little to reduce the problem for many Britons by offering them a chance to get into further debt.

Despite those with poor credit histories finding it nigh-on impossible to get any sort of credit, the banks and credit card lenders are falling over themselves to offer it to those who they judge can 'just' afford the repayments. The unsuspecting consumer is lured in by relentless offers of low-cost loans, low-interest credit cards and various other bits of paper which can prove too tempting to resist.

Amongst those being targeted are workers who go on spending binges, maxing out their credit cards, getting into debt, then living frugally for months afterwards to pay for it. While it isn't impossible to live like this, it isn't exactly easy, and the constant stream of red letters and phone calls from creditors can play havoc with stress levels.

If you have manageable debt and a letter offering you a 5,000 limit on a credit card drops through your door, it takes a strong will to resist. But giving in to this temptation will only exacerbate your current debt problems. While you may be just about able to afford the repayments now, what will happen a few months down the line if your life changes and you no longer earn the same amount? Missing even one payment could send the interest rate sky-rocketing and take your repayments to a level you can't afford.

Overdraft and credit card limits have also been seen to rise unexpectedly, without the consumer requesting it. Often these are of a high interest rate, meaning the consumer will be paying back absurdly high amounts for spending money they never asked for in the first place. If your bank or credit card lender gives you an unsolicited increase, ask for it to be reduced again. However much you think you could use the money, it's not worth racking up yet more debt for the sake of buying things you'll probably never use anyway.

About the Author

In these days of rising living costs, it's all too easy to give into the lure of extra money, even if it means getting into debt. But if you have debt problems, the last thing you need is fuel for the fire. Practise debt management and resist temptation!

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