November 2012

Interest rate rocks and hard places...

What is the most expensive way to borrow money?  An unauthorised overdraft is quite hard to beat, and dearer than a payday loan.

But what kind of borrowing can damage your credit rating, even if you make the repayments correctly? A payday loan may well give you a black mark.  The phrase “rock and a hard place” is difficult to avoid.

Why wouldn’t you give an eight-year-old a pre-paid debit card?

“Would you give a debit card to an eight-year-old?” reads the headline, followed by a yes/no survey.  Just watch those No votes stack up.

The story is based on news that, as of today (15 November), children as young as eight will be able to use a debit card to shop online. The prepaid Visa card can also be used in selected shops and to withdraw cash, although parents will be able to set controls.

Regional breakdown shows household debt most widespread in North East, while nationally shoppers cut back on spending

A new analysis from Which? shows that the North East, where unemployment is the highest in the country at 10.4 per cent, also has the highest rate of household debt.

Families there owe almost 34p for every pound in gross income.  By contrast the South West, with the lowest unemployment rate of 5.7 per cent, also has the lowest debt to income ratio, with households owing 12p for every pound of income.

New survey suggests a quarter of 18-24 year olds will consider taking out a payday loan in the next six months

Research on behalf of R3, the trade body for insolvency practitioners, suggests that as many as five million of us will think about taking out a payday loan over the next six months – a rise of 50% on this time last year. 

The number of 18-24 year olds likely to turn to a payday loan dwarfs that of other age groups, with some 26% considering this as a solution to financial shortfalls.  Just 4% of those over 45 would consider this kind of lender.