Re: Credit Mad Britain
 

1. All lenders come under the scrutiny of the Office of Fair Trading or Mortgage Code Compliance Board or Financial Services Authority.

2. Whenever someone gets into trouble, they always have brought it upon THEMSELVES.

3. It is quite simple to simply shred the "pre-approved" platinum card application you know. Nobody holds a gun to your head and makes you fill it in.

4. Anybody who borrows tens of thousands on CC's and is daft enough to believe it doesn't need paid back is stupid enough to go to a money lender instead.

5. If you think CC's have a high interest rate....

Re: Credit Mad Britain
 

Don't believe everything you see on the BBC.....

Re: Credit Mad Britain
 

How does it reduce monthly payments?

Quite simple

1. You owe say 20K on a card at 18.9% ( a typical rate)
2. If you make minimum payments (2-3%) that will take in excess of 16 years to clear.
3. Switch to a lower card (there are ones @ 9.9%), the interest you are being charged is simply cut in two. Still takes 12+ years to pay off mind
4. To *really* save money, remortgage down to 4+%, interest being charged is cut by a factor of 4.
5. Yes you are paying for it over the length of the mortgage, but you WERE DOING THAT ALREADY....
6. The really *SMART* thing to do, is not to take all the savings, leave some of it on the table and pay the entire mortgage off early....

..and yes, it is my job.

Re: Credit Mad Britain
 

I work in the mortgages industry, in the area I work, the level of self-certs is less than 10%.

People are NOT allowed to over borrow on mortgages, it is strictly regulated (by the mainstream lenders) and there is a limit on what you can borrow.

Earn less than 20K? - 3.5x salary plus second salary
Earn more than 20k? - 4x salary plus second salary

Re: Credit Mad Britain
 

thats in your area, i was talking about the total number.......


lenders regulate ?

your having a laugh :D

no people easily get away with getting them through brokers, some get them through lenders who DONT do the necessary checks

Re: Credit Mad Britain
 

The smart thing to do if you owe £20k on CC is to take up the introductory offers. It seems like regardless of time, there are always a number of credit card companies that will offer 0% on balance transfers, for either X months or if you're lucky, for the life of the balance. Surely, if you don't mind a bit of paperwork, you can punt your balance around from card to card, and never pay interest again?

Re: Credit Mad Britain
 

The thing is, *I* have a self-certificated mortgage, but that's because, when I took it out, I was self-employed and, as such, didn't have the three years of business books that mortgage companies were demanding.

However, having said that, I didn't extend myself beyond my means (in fact quite the opposite), nor would I ever do so, because I've got more financial sense!

Re: Credit Mad Britain
 

It's not quite that simple though.

For instance, as I'm sure I've mentioned before, with a credit card, if you buy something between £100 and £30,000 , you get the protection of Section 75 of the Consumer Credit Act which makes the card issuer *jointly and severally* liable for the purchase.

This means that even if the company you buy from goes bust, you can still claim recompense from the card issuer.

Whereas I *do* owe money to a CC Company, but only because, when I moved into my new flat about 2 1/2 years ago now, I ran up all my debts onto my credit card, however from then on every six months I've been shifting the balance onto another 0% deal card which means that I've been paying off the minimum amount and had the equivalent of a £4000 interest free loan for that period!

Oh, and the money to pay it off is sitting in an account currently getting 3.75% gross interest...!!

I also have another credit card which I use if I need to buy a "big" item, or something from abroad etc, but I use the "up to 56 days interest free" period to the maximum, then pay off the balance at the end of that time!

Credit cards etc are not necessarily a bad thing, you just have to know how to make the system work for you :D

Cheers,
Graham.

Re: Credit Mad Britain
 

Just a point, however, "nectar" points and other such schemes are, frankly, virtually worthless.

If you look at just how much you actually have to spend to get anything worthwhile you'll realise that the return is a fraction of one percent, which is even worse than the "money back" schemes that pay 0.5% and are only useful if you spend huge amounts on your card.

Re: Credit Mad Britain
 

Yes, however some recent debacles have shown how poor that scrutiny can often be.

That is IMO excessively harsh. Lenders often use what can best be described as "confusion marketting" techniques.

For instance if they give you a card that offers "0% on balance transfers for 6 months" how many people would look for, or *know* to look for something that says that if you pay off any amount on the card, it goes to pay off the *transferred* balance *first*, whilst all new transactions are running up interest?!

If you do not *ask* for an increase in your credit limit on a card, you should not be *offered* an increase. Nor should you even be given one without asking! (On a related point, some years ago, Nat West kept trying to up the "credit zone" on my bank account, whether I wanted it or not).

A lot of people simply do not *realise* how quickly debts can mount up until it's too late.

Yes, I know there are store cards that have 30% plus interest rates. There are also "roll up" home equity release schemes that have left people tens of thousands of pounds in debt because they weren't told the full details before they took them out.

To blame people for falling for these sorts of things without levelling equal or much greater criticism on those who peddle them is, IMO, simplistic.

Re: Credit Mad Britain
 

If you have cites to contradict this, please, let's see them.

The fact that The Money Programme was able to go into half a dozen different brokers etc and get specific instructions on how to fiddle the self-certification system is pretty telling.

Re: Credit Mad Britain
 

However you don't point out that there are two important assumptions in the above scenario:

1) That you *own* property that you can mortgage and

2) That you're willing to take the risk of losing that property if you can't make the payments.

I'm not saying it's a bad thing, but these things *do* need to be considered.

Re: Credit Mad Britain
 

Yep, this cloned tory government we have now will have to introduce some laws regarding borrowing methinks, unfortunately a lot of people need to be guided at times rather than run their own financial affairs.

Re: Credit Mad Britain
 

I'd be happy to see further regulation of the finance industry brought in, but I didn't think people wanted a "nanny state"!! :erm: :(

Re: Credit Mad Britain
 

There is a difference between a "nanny state" saying "you shouldn't see/ watch/ do that because it's bad for you" and the state regulating an industry which seems intent on forcing you to play "find the lady" if you want to use their products at all.