Credit Cards Being Used To Make Loan Repayments
As the effects of the credit crunch continue to bite deeper into the wider economy of the UK, more and more individuals are starting to feel the impact it is having on their own personal financial circumstances.
The rising cost of living, brought about by high inflation levels and increasing fuel and food costs, as well as the rising cost of loans, due to lenders’ inability to offer new deals to those coming to the end of their short term fixed rate deals, is having a profound effect on many people’s disposable income.
As was reported in the press last week, the majority of the UK population tend to be borrowers rather than savers, with mortgage, credit card and personal loan debt at record levels and rising and due to this fact, many individuals simply do not have any form of emergency fund to fall back on when things become tough.
A new survey conducted by the housing charity Shelter, has revealed that somewhere in the region of four million home owners have been forced to use their credit cards over the course of the last year to pay their household bills, personal loans and mortgage repayments, having the effect of leading them into an ever increasingly downward spiral of debt problems.
An official spokesman for the charity said “Our report shows just how difficult it is for ordinary people to cope with spiralling housing costs and how desperately unaffordable housing has become.”
The Government is currently in the process of launching a support package for many individuals who are struggling with debt problems on their loans and mortgages. The housing minister, Caroline Flint said “We are taking action to support families who may be facing difficulty because of current market conditions, with £9 million more for face to face debt advice and free legal advice to all households at risk of repossession.”
The help package needs to arrive sooner rather than later and unfortunately for many, the Governments support plan may just arrive too late to be of any help.
