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Jonnyboy

Joined: 29 Oct 2004
Posts: 23956
Location: under some rain.

Posted: Mon Aug 01, 05 10:56 am Post subject: Easy credit

...just watch those google ads appear!

Went into a well known DIY chain to buy a kitchen, they offered me a 'buy now pay in six months' card with all the usual bells and whistles, massive APR if I don't pay it off etc.

Now, with the uncertainty of a new build I decided to take them up on the offer so I could keep some cash in reserve for emergencies.

The application process took less than five minutes, I only had to give one from of reference, no salary details, no previous address an I now have ï¿½5k of credit to use immediately, That limit was self imposed, i could have asked for ï¿½25k.

So with very little checking I had the ability to get myself into serious debt, with no realistic chance of paying it back. There is always an element of personal responsibility but the easy availability of credit, coupled with the prevalence of pushy advertising can make it very hard to resist.

jema
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 28239
Location: escaped from Swindon

Posted: Mon Aug 01, 05 11:08 am Post subject:

There are endless horror stories of people racking up tens of thousands of pounds of debt in a few hours like this

The debate as to where the blame lies, and about personal responsibility is I think a highly politically charged one, that goes to the core of your views on the world.

I tend to think we live in a society where unless you have a private education, you are generally trained in school to passively absorb a set of knowledges that is not geared to debate and independant thought. An education that does not encourage individualism and personal responsibility

Coupled with this, we have industrial scale brainwashing of the masses, via sophisticated marketing, designed to appeal to a sheep like mentality.

So whilst I despair of the way people do get suckered into debt, and think they need to take responsibility. I think the very nature of society is geared against this.

Treacodactyl
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Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Mon Aug 01, 05 12:02 pm Post subject:

I certainly think the financial companies should do far more to sort out some of the mess and I bet the FSA will start to toughen up on them over the next few years as house repossessions continue to increase. However, at the end of they day you should treat most people as adults. Many people can control things themselves so why treat people differently? If you go down the route of saying some people can't cope then should we appoint someone to look after all their finances, should we compel them to save into a pension etc as these will probably be the people with few savings later in life?

jema
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 28239
Location: escaped from Swindon

Posted: Mon Aug 01, 05 12:04 pm Post subject:

Treacodactyl wrote:

should we compel them to save into a pension etc as these will probably be the people with few savings later in life?

Well once apon a time things like National Insurance and SERPS were things that people paid into on a compulsary basis, in the belief that this would give them a pension!

Jonnyboy

Joined: 29 Oct 2004
Posts: 23956
Location: under some rain.

Posted: Mon Aug 01, 05 12:09 pm Post subject:

Treacodactyl wrote:

Couple of thoughts.

1. Isn't most of this unsecured debt?

2. We've stopped cigarette advertising because it's encouraging you to do something that's bad, there are controls on alcohol advertising, and advertising for kids. Given the potential consequences of debt - loss of house, job, family...life? shouldn't it be quite carefully controlled?

BTW - check out the wording on the ad's on the left, it sums it all up really.

Bugs

Joined: 28 Oct 2004
Posts: 10744

Posted: Mon Aug 01, 05 12:16 pm Post subject:
The moneysavingexpert site is running a campaign called "not in front of the kids", to stop debt/loan etc ads on children's tv on the grounds that it is teaching children that debt is normal.

hils

Joined: 08 Mar 2005
Posts: 568
Location: Nottingham

Posted: Mon Aug 01, 05 1:29 pm Post subject:

Its amazing isn't it?
I have over 100k collateral sp?on my house and the B@$t@rd$ wont let me have 15k out of it. They say because of poor credit rating. Which is a CCJ which has three month left till it expires and was paid off within 32 days of recieving it (30 days it would have been written off anyway. This was only for ï¿½40.
The whole credit / debt issue wants to make me s**t!

Now if I wanted to borrow 15k on a credit card - no problem (same lender), but if I want to spend some of my own money forget it!

Use them JB and don't let them use you!

(God I need a fag after that and I dont even smoke!)

chrissy

Joined: 20 Feb 2005
Posts: 238
Location: Pangbourne

Posted: Mon Aug 01, 05 2:44 pm Post subject:
There's nothing wrong with using credit intelligently. What a good campaign on the money saving expert site. I have seen a couple of episodes of "The bank of mum and dad". The attitude towards credit and debt is truly frightening. Live now, but never even think that it will eventually catch up with you.

tawny owl

Joined: 29 Apr 2005
Posts: 563
Location: Hampshire

Posted: Mon Aug 01, 05 4:25 pm Post subject:

chrissy wrote:

I have seen a couple of episodes of "The bank of mum and dad". The attitude towards credit and debt is truly frightening. Live now, but never even think that it will eventually catch up with you.

Absolutely. I enjoy that programme (even though it has the same confrontational nonsense that most of these suffer from), but I do get exasperated with the people on it. I itch to slap them very very hard with a wet fish. They seem to think the world owes them a living and that all that should matter is going out, buying horrendously expensive clothes and tons of makeup/gadgets (depending on gender), and never worrying where the money's going to come from. One of the big problems (and I've heard a number of people of my acquaintance give this as the ultimate get-out-of-debt-free card) is that they reckon once it gets really bad, they can just go bankrupt. Apart from the fact that I think this is morally reprehensible (IMO, spending money you've been lent and then refusing to pay it back is fraud), they seem to have no concept of how difficult their life will be later; they seem to assume that all that will happen is they won't be able to get a credit card for 3 years, whereas actually, they will probably not be able to get a mortgage, some buisnesses may refuse to employ them, and some occupations will be closed to them. It would be nice to think the FSa would have some impact on this, but can you legislate for people being that thick?

Bernie66

Joined: 14 Jan 2005
Posts: 13967
Location: Eastoft

Posted: Mon Aug 01, 05 8:09 pm Post subject: Re: Easy credit

Jonnyboy wrote:

That was not one I should know a little about was it? We are targeted as a store at opening a certain number of new cards each week. The idea is that people, once they have the credit will use it. Alot of staff have a big issue selling credit and are not particularly good at it-either by making no effort or because they find it hard to put their heart into something they don't believe in. Or because they are trained in retail sales not financial sales.

Jonnyboy

Joined: 29 Oct 2004
Posts: 23956
Location: under some rain.

Posted: Mon Aug 01, 05 8:41 pm Post subject:

Possibly Bernie!

The staff certainly had not the first clue as to filling out the forms, they got the printing out wrong twice and asked me 'did I want to sign up for the junk mail bit' which was refreshingly honest.

But they did say that they had no training on it, and there was little demand, but if a certain store wants to give me six months interest free credit on something I was already going to buy then great. The worrying issue is as you said, having a larger amount of credit and then spending up to that limit.

Gertie

Joined: 08 Jan 2005
Posts: 1638
Location: Yorkshire

Posted: Tue Aug 02, 05 6:34 am Post subject:
It's scary how much credit you can be given - you can understand how some people have fallen into the trap of running of thousands of pounds worth of debt. For emergencies only I have a credit card which I only wanted a few hundred pounds credit on, they gave me ï¿½6k. I do have 3 store cards which don't get used - self control or what!!!!!!

tawny owl

Joined: 29 Apr 2005
Posts: 563
Location: Hampshire

Posted: Tue Aug 02, 05 8:18 am Post subject:

Did anyone see the Real Story programme last night on this? Quite shocking.

One man who told the bank he couldn't read or write (because he clearly had a quite serious learning disability) was given money without question, and a man with manic depression took out over ï¿½100,000 of loans during his manic phase.

Bank staff were saying they were put under pressure to push loans, to the extent that some were having to stay late to make cold calls, sometimes even having to make them at home at their own expense.

jema
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 28239
Location: escaped from Swindon

Posted: Tue Aug 02, 05 8:34 am Post subject:

My bank is located in a rather heavily traffic warden patrolled area, with no free parking. All in all a typical bit of council pain in the bum behaviour, penalising people who just need to park for 5 mins.

But it does stress my be nice to staff (their only doing their jobs) rule, as a 30 second transaction is extended with them trying to flog me a loan or whatever each and every time I visit the bank

Bernie66

Joined: 14 Jan 2005
Posts: 13967
Location: Eastoft

Posted: Tue Aug 02, 05 2:46 pm Post subject:

Jonnyboy wrote:

Possibly Bernie!

That credit isue is the responsibility of G.E.Capital who basically run the card and with whom the contract is with once you have signed.The whole idea I believe is for Capital to grow their database of credit borrowers using the footfall of the company and the Brandname to entice people in. And of course the company get the initial spend. Data indicates that repeat spend in the store is usually fairly high-to "finish a project" etc which would imply its being used as credit rather than people taking advantage of interest free period and crashing their money into high interest account for 6 months etc.
But there again every other company is doing it so I suppose its understandable from the companys point of view

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