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Archive for October, 2007

Start The School Year Right

Tuesday, October 23rd, 2007

Almost every student starts their school year with enough money to last the year. This money is usually borrowed. However, once students start the school year they forget how to budget, and that they must carry this debt for years.

Any bar in a university district will tell about friends who buy expensive rounds of drinks for all their friends, or shops who see the same students day after day buying clothes or shoes.

New friends, and peer pressure can make the most level-headed student careless with their money. Many students feel the pinch because they need friends. They need to recreate the network that helped them survive school.

Others are stepping out for the first time. Faced with the responsibility of being an adult, and the excitement of being independent for the first time, may young adults go punch-drunk.

This lasts for a month or two, then the reality hits. They look at their budget and realize that they won’t survive until spring unless they tighten their belts.

Student loans can take decades to repay. They can make it difficult to apply for a mortgage, own a home, and in some cases, many young adults claim that their student loans are preventing them from starting a family.

The best debt management program is a strong budget.  The next is avoiding peer pressure and staying away from social situations where you may be encouraged to spend money, or to treat a whole table of friends.

Remember, it is possible to end the school year without acquiring more debt, or needing to ask your parents to take out a mortgage.

Posted in Bad Credit, Borrowing, Budgeting, Consumer Credit, Consumer debt, Debt management, Personal debt, Student debt, UK Finance | No Comments »

Changing credit cards

Tuesday, October 23rd, 2007

If you are considering switching from your current credit card provider to a new one because you are having trouble paying back your balance then it would be helpful if you were aware of a few pointers first.

Many credit card companies offer very low interest rates on balance transfers; sometime this can be as low as zero percent. But there is a time limit on this balance transfer. So for example if you need six months to pay off your debt and the zero percent interest on balance transfers apply for the first six months then this is an option worth considering. This could possible save you from having to pay back possibly hundreds in interest fees.

The danger is if you do take that option and you fail to pay back the balance within the given time period the zero percent will revert back to the normal rate of the loan and this includes the lender then charging for interest on the first six months of the loan as well. This could result in repayments outweighing the benefit of the zero interest on the first six months. Banks do have a responsibility to warn you if the introductory offer of zero percent is about to run out. However as a general rule its better not to trust banks if you can help it when it comes the things like this. Just make sure you yourself are always aware of the time limit on your offer or one morning you could wake up to a big surprise.

Posted in Balance transfer, Borrowing, Consumer Credit, Credit Card, Debt management, Financial products, interest rates, Personal debt, UK Finance, Zero percent cards | No Comments »

Debt Hurting the Elderly

Thursday, October 11th, 2007

Director of Help the Aged in Wales, Ana Palazon, said that those elderly on fixed incomes who have not paid off their home loans will have been hard hit by this year’s rate increases.

“People with sufficient savings will always benefit from high interest rates, but the reality in Wales is that we don’t have older people with massive savings,” she said.

“Most are dependent on state pensions and therefore any increase in interest rates will not be of benefit. And while interest rates have increased we have not seen a proportionate increase in the state pension.”

Principality chief executive Peter Griffiths urged homeowners to seek professional advice and find ways to reduce their monthly commitments to loans.

“We are advising people not to panic but to look at how it will affect their finances. They can seek advice from a mortgage adviser who will help them to consider their options and possibly reduce their mortgage repayments.”

Roger Bootle, an economic adviser to finance experts Deloitte & Touche, said the Bank of England’s Monetary Policy Committee (MPC) was determined to keep inflation low at all costs.

“It might not be too long before the MPC follows up the interest rate rise to 5.75% with another increase.

“And even interest rates of 6% might not be enough to secure the continuation of the UK’s low inflation environment.”

Mr Williams, managing director of North Wales estate agents Williams & Goodwin, said, “It will help continue the stability of the market, which should help first-time buyers. In the scheme of things when you look at interest rates over the last 20 years they are still quite low now.”

Posted in Borrowing, Consumer Credit, Consumer debt, Debt management, Financial news, Homeowner Loans, Homeowners, interest rates, mortgages, Personal debt, Property, Remortgaging, Secured loans, UK Finance | No Comments »

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