IVF's

[BDunnell]

I think an IVF is the 3rd one.

Didn't IVF used to be the leader of the Conservative Party?

[Hazell B]

I do still think that the banks and other organisations can't be absolved of all blame, as it is undoubtedly easier for irresponsible people to get themselves into debt than it used to be. The opportunities for being able to run up debts are becoming greater than ever before, and I don't think we should be surprised that people decide to take advantage of them.

That sounds like a reasonable argument, but it isn't. The banks and loan companies, plus the sofa buy-now-pay-never folk, all have to point out the small print and so on. The fault for debt is completely with those taking out the loans if they don't bother (or care, often as not) about the future and paying.

Many loans are for good reason and ease of getting the loan makes good business sense to the bank, it encourages customers, so the balance between good sales and bad sales has to be found. I believe they've found it, but idiots are taking advantage.

Put it this way, some of us know eating lard will kill you. Some of us don't eat too much lard because of that knowledge. Some of us eat lard and stick our heads in the sand, safe in the knowledge that doctors know nothing. It's human nature. We all have an 'It won't happen to me' safety blanket and it just seems debt is a common one.

That's why I have no credit cards!

[airshifter]

I agree Hazell, the responsibility is that of the borrower.

On the other hand, a great number of financial institutions are just asking for trouble with their lending practices. When we bought our home, we were approved for considerably more than I could have paid at the time. Though I was smart enough to not buy beyond my means, these easy loans are often like waving a bottle in front of an alcoholic.


And really, if you are money smart, credit cards are a good thing. At worst they are short term interest free loans if you pay in full. At best you can often borrow interest free for longer periods of time, assuming you have good credit. Besides I never quite know when I might want to charge a new car rather than waiting to fill out loan paperwork.

[BDunnell]

That sounds like a reasonable argument, but it isn't. The banks and loan companies, plus the sofa buy-now-pay-never folk, all have to point out the small print and so on. The fault for debt is completely with those taking out the loans if they don't bother (or care, often as not) about the future and paying.

Many loans are for good reason and ease of getting the loan makes good business sense to the bank, it encourages customers, so the balance between good sales and bad sales has to be found. I believe they've found it, but idiots are taking advantage.

Put it this way, some of us know eating lard will kill you. Some of us don't eat too much lard because of that knowledge. Some of us eat lard and stick our heads in the sand, safe in the knowledge that doctors know nothing. It's human nature. We all have an 'It won't happen to me' safety blanket and it just seems debt is a common one.

That's why I have no credit cards!

Those are all very good points, well put. However...

[BDunnell]

I agree Hazell, the responsibility is that of the borrower.

On the other hand, a great number of financial institutions are just asking for trouble with their lending practices. When we bought our home, we were approved for considerably more than I could have paid at the time. Though I was smart enough to not buy beyond my means, these easy loans are often like waving a bottle in front of an alcoholic.

...I do think there's much truth in that, too. As I said, there are certain reasons why this is a growing problem, and I don't think it's all down to people becoming more stupid.

[Dave B]

Possibly the biggest single factor is that lenders based their decisions on past history, not future ability to pay.

Let's say Mr X takes home £1000 per month after tax, and has quite happily been paying £700 per month on his mortgage, credit cards and Linda Barker sofa. He never misses a payment, and has no history of CCJs or similar. He'll have an excellent credit rating.

But would you lend him enough to buy a car? Even though you know he's only got £300/month after all his other committments, from which he needs to feed and clothe himself. Most banks would...

[EuroTroll]

But would you lend him enough to buy a car? Even though you know he's only got £300/month after all his other committments, from which he needs to feed and clothe himself. Most banks would...

I must say that I continue to be absolutely perplexed by what is written in this thread. It simply seems so improbable that in the UK - i.e. in the country that probably has the longest history of practising capitalism - people and businesses alike make decisions that are truly irrational, and there are laws in place to support that.

In my part of the world, you surely wouldn't get a loan from any bank unless you had proper collateral, and if you're in the debt, the bank will clean you up until there's nothing left to settle the debt. Which, I've always thought, is as it should be.

[Hazell B]

But would you lend him enough to buy a car? Even though you know he's only got £300/month after all his other committments, from which he needs to feed and clothe himself. Most banks would...

Technically now, they shouldn't. Don't know if they would (I have never had a loan) but they shouldn't with the self governing thingies they've started - sorry, no idea what they're called - that make sure each company can check other lending.
Plus, he'd get an extended mortgage if he got in trouble. That's something that's getting more common and I can see people in the seventies paying off debt in a few years time Frightening thought, and one we may all have to pay for in the long run.

I get that credit cards can be interest free loans each month, but they still scare the poo out of me! I just wouldn't dare risk not paying cash, which I guess makes me in the minority, but I'm happy that way. Keeps me working because if I don't, I starve :