Fri 29th Sep, 2006
Debt: good or bad?
An article in The Times Online warns against allowing people to ‘borrow in haste and repent at leisure’. Writer Camilla Cavendish is commenting on the recent news that the average Brit has twice as much consumer debt as the average West European, to the tune of £1.25 trillion. While Cavendish says that not all debt is bad, citing the millions of people who have acquired their own homes through mortgages, she bemoans the scarcity of sound financial advice.
Cavendish notes how easy it is to transfer balances and rack up debts, with one couple in Glasgow recently reported to have remortgaged their home eight times to the tune of £300,000. She also says that many people are ignorant about the true nature of the financial products they buy and wonders how many people have been mis-sold credit cards and other debt products.
She comments: ‘It is lunatic that the law makes it much easier to entice people into debt than to encourage them to save,’ adding: ‘Cheap money has helped to keep the economy going. But only for so long. When people fall prey to loan sharks, or default, they hurt not just themselves and their families. They will also cost us all in the long run, because they are making wholly inadequate provision for their old age.’