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DCM Money Solutions, one of the UK’s leading debt management and financial solutions companies, says spending on plastic is the most common cause of debt worries, a fact which has been backed up by Dispatches, the Channel 4 programme.
According to last night’s investigation by Dispatches, this Christmas shoppers are expected to spend £31 billion on the high street, of which £7 billion will be on plastic.
The programme also examined the tricks used by the high street banks, major credit card companies and retailers to target vulnerable consumers, allowing them to rack up debts on plastic and then charging them higher repayments. What the programme didn’t address was the responsibility of the consumer to repay any credit they take out.
At this time of year consumers are vulnerable to signing up for store cards, there are so many offers with the lure of ‘exclusive store card holder’ events and ‘discounts’ on their first purchase all to entice consumers to sign up.
John Baird, Managing Director, DCM Money Solutions said: “This form of spending is showing no signs of slowing down. What people don’t realise is that most store cards are often more expensive than credit cards. These cards are usually ‘sold’ to customers by untrained shop assistants who have little understanding of the problems associated with borrowing and debt; they are merely incentivised to push as many cards as they can.
Credit and store card debt can start to build up very quickly for unsuspecting consumers, with high interest charges and low repayments many consumers are still paying back their debts from last Christmas.
John continued to say: “That said, people should read the small print and take some of the responsibility for their debt, all the blame can’t be apportioned to the credit and store card providers. At the end of the day if you borrow money you have to repay it.”
DCM Money has developed some top tips for consumers to wise up to the ‘Twelve days of Debtmas’.
1. Pick the card with the lowest APR and pay a little bit more than the minimum payment each month
2. Pay as much as you can each month off the balance
3. Transfer any existing credit card debt to cards with interest an interest free period. But make sure you pay off the balance before the interest free payment finishes
4. If you consolidate existing credit cards onto one card or loan make sure you cut up old cards
5. Learn to differentiate between needs and wants
6. Pay cash wherever possible particularly with reference to point five.
7. Learn to budget
8. Get in the habit of saving a little bit each month. The general rule of thumb is that you should have three months income put aside for a rainy day.
9. Review all your borrowings and debt on a regular basis
10. If you are in over your head get professional help as soon as you can. Alarm bells should start ringing if you are always living off your overdraft
11. Only seek advice from companies that offer a range of solutions – not just a one trick pony that offers IVAs.
12. Once you’ve sorted your situation don’t do it again
John Baird says that all the signs are here for an explosion in plastic debt: “We are witnessing a slowdown in the housing market, house repossessions are on the increase, mortgage approvals continue to decline and people have become accustomed to easy credit. These indicators all suggest that people will continue to turn to the plastic to prop up spending in the months ahead.
“For many consumers the only way to get by is to rely on their cards. We always receive a huge amount of calls from people at the end of January when the first bills start to drop onto peoples doormats.”
Although last Thursday saw the decision by the Bank of England Monetary Policy to cut base rates by a quarter per cent, this isn’t going to help the majority of consumers with their Christmas debts.
This combined with the banks licking their wounds from the global credit crunch, means consumers are not going to find it as easy as they have done to borrow money and those who already have debts are going to find it more expensive to pay back. “Consumers need to spend wisely this Christmas or the financial hangover for the New Year is going to be miserable one for many people”, concluded John.
By: Steve Neale
Article Source: www.ArticlesBase.com
Steve is the webmaster and internet marketing techy person behind www.dcmmoney.co.uk
Steve regularly listens to the advice the business owner, John Baird, gives out on his weekly regional radio show on Heart 106fm.
Based on what people are calling about, the articles are therefore relevant and often topical
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