Are we really to blame for all our credit card debts?
'Credit cards are a necessary evil', apparently so! If latest figures are to be believed we simply cannot live without our store cards. UK personal debt stood at £1,325bn at the end of April 2007, with £54.0bn of that solely on credit cards. We are spending like there is no tomorrow! We don't care about our incurred debts, we shun debt advice and we look like we are becoming a nation of bankruptcy “victims”!
There are no victims here, I said! Yet it was pointed out to me that maybe we are less to blame for our savage spending as we first thought!
With more credit cards then people in this country I am beginning to see the point. How can one legitimately reject such a wonderful thing as a credit card when they are everywhere? The average holder has 2.2 credit cards and a hell blazing desire to be in debt, well maybe the last bit isn't so true but you get my gist! With all these credit cards, I got to thinking about how can we need or want so many? I couldn't believe our generation had suddenly become so completely dependently consumerist, maybe something else was at work when looking at the amount of people who need debt advice and more scarily, the amount of people who declare bankruptcy!
It appears my suspicions were not so overrated! In my research I came across an article detailing the sneaky tactics that credit cards use to entice the average Joe into months, maybe years of payback schemes and savage interest rates! The most shocking tactic apart from being ludicrously tempting, is to not fully explain to a potential customer the full extent of the interest they will be charging, which on average is 15%, well over the 5.75% Bank of England base rate! By having the full facts hidden in the small print or allowing financially unsuitable people to start an account anyway it appears rather unethical!
It was mentioned that maybe credit cards should add a “Wealth Warning” to their cards if the full extent of the interest charges were not obviously stated. All to act as a deterrent to the hundreds of thousands of people who sign up for store credit cards daily and have not read all the small print or simply haven't completely got the concept of such debts!
Such a warning would be a fabulous idea! How many people would say no to such store cards if they knew the interest rate was 25%. If the card had a “Wealth Warning” so visibly attached I would wager that credit card debt, debt advice and in turn bankruptcy rates would fall dramatically in this country and really rather quickly!
