There is current concern from Bank of England that British families are getting deeper into debt, however, it has been said that lenders are putting themselves at risk because people are now more willing to make themselves bankrupt.
Despite people already having significant amounts of debt, credit card companies are still prepared to lend these people money. This is a combination of a creditor not knowing full picture of a persons financial commitments and employees of credit card companies being under pressure to sell credit cards and insurances policies to earn bonuses.
People will receive random telephone calls from companies who will try to sell benefits of their cards and use selling point of lower rates plus option to transfer balance from their current credit card at a lower rate.
Many people who receive these calls may already be in some kind of debt. There possibly will be some who are currently looking for solutions to their debt problems, and temptation of obtaining a new card thereby having more spending power could prove hard to resist.
The Bank of England has every right to be concerned about financial state of this country, but possibly lending system needs to change to make it more difficult to obtain credit.
Lending companies blame debtor, and debtor blames lending companies but who will stand up and make a difference when it comes to huge family debts UK are currently experiencing?
We have already been made aware that borrowing in UK has crashed through 1 Trillion pound barrier, but surely this should provoke concern rather than just being a headline in a newspaper.
The Government are concerned with raising financial awareness, however, what restrictions do lending companies have? We know that a new Bill is currently in motion, which was first mentioned in Queens Speech back in November 2004 and is set to come into effect in mid-2006. This bill will give creditors more rights over debtors rather than placing any restrictions on how creditors lend money.
Yet another case of suicide due to debt is circling Internet. 43-year-old Mark McDonald’s body was found on a railway near his home, with him was his rucksack containing 80 letters from his creditors regarding monies he owed which mounted up to £65,000. Mr McDonald is now 5th known person who has taken his life due to debt in last 2 years. Others include a 21-year-old farm worker who owed £10,500 and a 65-year-old grandad who owed £135,000.