Inflexible friends and plastic assets, why money isn’t buying love anymoreWritten by Rachel Lane
It would appear that even though their “friends” aren’t as flexible as they used to be, consumers are still stretching their credit cards beyond comfort zone.The vicious circle of debt manipulation involving banks, consumers and commercial credit companies is putting consumer spending under strain, as funds begin to dry up. In May 2005, Financial Times reported accusation that banks were fuelling Britain’s personal debt problem by repeatedly offering debt-ridden customers loans they were unable to repay. As UK’s personal debt increases by £1 million every four minutes, credit card spending habits still seem to be spiralling out of control. According to Credit Action, nearly 66% of adult population have a credit card, with multiple card holding becoming a growing phenomenon in UK. More than 60% of card holders possess at least two cards, with 10% holding at least five cards. There has also been a significant rise in number of personal bankruptcies. In year up to March 2005, 37,886 people were made bankrupt, a 30% increase on previous year. Credit Action reported that some credit card companies reduced their minimum repayments from 3% to 2% last month, which has been seen by some as irresponsible. To put this into perspective, a £3000 credit card balance at 17.9% APR would now take more than 40 years to repay if minimum repayment of 2% is paid each month, in comparison to 19 years with 3% minimum repayment. Barclays even warned of falling profits for Barclaycard credit card division last month, as more customers missed repayments and bad debtors increased.
| | Home Equity Loan Information - What Is A Home Equity Line Of Credit?Written by Carrie Reeder
Did you know that if you have a home that you’ve been paying on for years, you may have a lot of usable money right under your nose? What’s more, a home equity loan just may be perfect way to get your hands on that money!Here’s how it works. Let’s imagine that your home mortgage is for $250,000, but after years of paying on that note, you only owe mortgage company $100,000. In this instance, you would have $150,000 in equity in your home. A home equity loan is a specific type of loan that will allow you to borrow against that equity. Why would you want to do this? The number one reason that people take out home equity loans is as a means to consolidate their debt. Because a home equity loan is a secured loan, interest rates are considerably lower than that of credit credits or personal loans. And so if a person had $10,000 in credit card debt, they could reduce total amount of owed—as well as their monthly payments—by taking out a home equity loan and using cash to pay off their credit card debt. Another great reason for taking out a home equity loan is to make improvements on your home. Have you been thinking about adding a swimming pool to your backyard? A greenhouse to your yard? A new bedroom or bathroom addition? A home equity loan is a great way to finance those types of projects.
|
