Finance Choices
Brits 'comfortable' with loan and credit card debt
British households could wipe nearly £30 billion from their personal debts, but many simply cannot be bothered.
By receiving financial advice, ten households were able to reduce their personal debts by £1,215 on average in just three months.
If the same level of success was applied to each of the UK's 24 million plus households then personal debt would be reduced by £29.7 billion.
These are the findings of an ongoing experiment by AXA on the impact that regular financial advice can have on reducing personal debt.
But research indicates that 70 per cent of Britons were not bothered about their debt, including loans and credit cards, because most people have some debt these days.
With the proliferation of cheap loan and cheap credit card deals, four out of five Brits feels it is more acceptable to be in debt now than it was 20 years ago, according to national research by AXA to accompany the project.
And the majority are comfortable with borrowing up to £6,370 ? about 28 per cent of the average national salary; although some would happily borrow as much as £50,000 on loans and credit cards.
The AXA Avenue experiment involves 20 households from Brighton being given advice by independent financial adviser Saran Allot-Davey.
Launched in November 2005, Ms Allot-Davey has spent time with the first ten households and the results from the first quarter of the experiment are now available.
Among the achievements are improved attitudes to finance, with participants taking proactive approaches to clearing debt on loans and credit cards by selling unwanted items on eBay.
Some participants have cut up their credit cards and started using the web to research the cheapest deals from utility providers, while others are now joining pension schemes to secure their retirement.
Ms Allot-Davey said: "The first quarter has been challenging because the focus has been on dealing with managing and reducing debt, however it was vital that we tackled this before starting to look more long term. I believe we have made some good progress so far, with most participants paying much less interest on their loans, having reorganised or consolidated them."
"The best bit for me has been the enthusiasm of the group and seeing how well some have responded to some basic financial guidance. I believe that people are generally apathetic when it comes to managing and reducing their debt and tend to need a catalyst to drive positive financial change."
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By receiving financial advice, ten households were able to reduce their personal debts by £1,215 on average in just three months.
If the same level of success was applied to each of the UK's 24 million plus households then personal debt would be reduced by £29.7 billion.
These are the findings of an ongoing experiment by AXA on the impact that regular financial advice can have on reducing personal debt.
But research indicates that 70 per cent of Britons were not bothered about their debt, including loans and credit cards, because most people have some debt these days.
With the proliferation of cheap loan and cheap credit card deals, four out of five Brits feels it is more acceptable to be in debt now than it was 20 years ago, according to national research by AXA to accompany the project.
And the majority are comfortable with borrowing up to £6,370 ? about 28 per cent of the average national salary; although some would happily borrow as much as £50,000 on loans and credit cards.
The AXA Avenue experiment involves 20 households from Brighton being given advice by independent financial adviser Saran Allot-Davey.
Launched in November 2005, Ms Allot-Davey has spent time with the first ten households and the results from the first quarter of the experiment are now available.
Among the achievements are improved attitudes to finance, with participants taking proactive approaches to clearing debt on loans and credit cards by selling unwanted items on eBay.
Some participants have cut up their credit cards and started using the web to research the cheapest deals from utility providers, while others are now joining pension schemes to secure their retirement.
Ms Allot-Davey said: "The first quarter has been challenging because the focus has been on dealing with managing and reducing debt, however it was vital that we tackled this before starting to look more long term. I believe we have made some good progress so far, with most participants paying much less interest on their loans, having reorganised or consolidated them."
"The best bit for me has been the enthusiasm of the group and seeing how well some have responded to some basic financial guidance. I believe that people are generally apathetic when it comes to managing and reducing their debt and tend to need a catalyst to drive positive financial change."
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Best buy loans
posted by Bruce Wayne at 1:19 PM
Brits 'comfortable' with loan and credit card debt
7 Comments:
I hate my debt level! ....about 40% of my income goes towards debt! :(
I'm working on it, though, and I am finally beginning to see a change! (no longer making minimum payments only! paying ALL cc's on time every month...)
I am not now nor have I ever been comfortable with my debt. We are doing everything we know how to get it paid off. One of our cars will be paid off this year (December) and then that money goes for more of the debt. Moving to a warmer climate might help, my gas bill was like another car bill last month.
Currently, I'm comfortable with my debt, as I don't have much. I have 1 credit card to pay off ($2200), and that will be paid next week (it was a balance transfer from a couple of cards...had 0% interest rate on that card for the past year, and the low rate ends in Feb). I had major dental work done last year, so I have a dentist bill that I opened a CareCredit account for, but the interest rate is 0% until August, so I'll pay that off then (should be around $900). Other than the mortgage, I have nothing else. Thankfully, I paid my car off last year, and my husband's cars are paid off as well. He has no credit debt. I'm praying that nothing major or drastic will come up that will make me/us have to go into debt or dip into our savings.
I am not comfortable with my debt level. I am happy that I have no credit card debt, but owing a lot of money on a land payment really upsets me. I know I could sell the lot and make $30 or 40k more than I paid for it, but land is going to be higher in a few more years. My payment was $660 a month and of that over $400 was interest. that really bothered me. I have paid every dime extra on it this year and now my interest is only $200 a month. (That still bothers me to pay the $200)
The debt on the car does not bother me as much as the land, so my priority is to pay the land off as fast as possible.
I am not comfortable with my debt. It gives me stress. I am making sacrifices to get it paid off. I hope to be debt free excluding my mortgage by the end of the year and mortgage gone in less than 10 years. Barring catastrophic events both should be doable.
I am quite happy with my debt ratio. Besides car note and mortgage the only balances i carry on other accounts are same as cash or amounts that get paid in full each month.
The only way I will buy large purchases anymore are by using the 6, 12 or 24 months same as cash offers. Furthermore, if I could not affod to pay cash for the item I will not finance it even under these terms. I basically use their offers to my advantage. Why not hold onto my money for those 12 months and draw interest on it myself.
DEBT SUCKS!!!! And No, I'm not happy with it! But I am trying my best ot pay off the laptop that I bought for work and that should be done in a couple of months!!! I think it;s the rent payments that really put me behind! hee hee
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