Consumer debt hit an all-time high last year

[crankedup]

^^^^^
That's all very well but a little misleading concerning the comments regarding consumer debt.
Currently that level of debt is very high, high enough for the BOE to fire a shot out in the form of warning. The BOE will at some point raise interest rates that will slacken demand for loans. Also a warning that lenders could see some tightening of loan requirements making it tougher for people to qualify for a loan. This measures are just a warning at the moment but clearly the BOE is concerned regarding the level of consumer debt at the moment.

[Granfondo]

Personal debt at an all time high and personal savings at an all time low with interest rates only going to go one way!

What could possibly go WRONG!!!!

[crankedup]

Granfondo said:

Personal debt at an all time high and personal savings at an all time low with interest rates only going to go one way!

What could possibly go WRONG!!!!

Indeed, the consumer credit boom is directly related to the lack of savings, ultra low interest rates. Still likely stacks of cash have gone into the purchase of stocks / shares.

[menousername]

crankedup said:

Indeed, the consumer credit boom is directly related to the lack of savings, ultra low interest rates. Still likely stacks of cash have gone into the purchase of stocks / shares.

Mostly institutional money though

I think we greatly over-estimate how much cash the average person/family have. I doubt very many have even an investment ISA or know what one is.

[gumshoe]

mjb1 said:

The card provider doesn't get any money from the transaction fees. The merchant's bank gets the fee (which could in theory be the same bank, but only by sheer coincidence), which is then split a number of ways e.g. VISA or MasterCard anyway. So you really don't know what you're talking about.

A big part of what I feel is going on is that the banks are trying to lure people into spending with these interest free/special introductory rate offers. They're taking a calculated risk that a proportion of the people taking up the offers won't clear the debt before the charges start to kick in.

The card companies know exactly what your monthly income is, and how much is coming and going from your current account, along with your credit rating. Yet they are still increasing people's credit limits and offering them cash advances of relatively large amounts.

Some scary reading about what the banks are up to with your personal data: http://www.telegraph.co.uk/personal-banking/curren...

Sorry to say it is you who's wrong.

The card issuer (and whether it is as a cobrand or the issuing bank is the brand) will be receiving interchange on every transaction.

As youngsvr has said it will be between 0.20 and 1.5% depending on the card.

[crankedup]

menousername said:

crankedup said:

Indeed, the consumer credit boom is directly related to the lack of savings, ultra low interest rates. Still likely stacks of cash have gone into the purchase of stocks / shares.

Mostly institutional money though

I think we greatly over-estimate how much cash the average person/family have. I doubt very many have even an investment ISA or know what one is.

Yes I expect your not far off, although I do believe that some of the grey army will have taken. up unit trusts and the like. No point in using the traditional high st saving vehicles.

[PurpleMoonlight]

r

Granfondo said:

Personal debt at an all time high and personal savings at an all time low with interest rates only going to go one way!

What could possibly go WRONG!!!!

Ah, so if rates are only going up I had better get a loan now while it's cheap.

[James_B]

Granfondo said:

But it's not getting money out is it?
It's leaving money in your savings account and spending on your card?
So tell us again how you get money out of a cc for free?

Yes, of course it's getting money out of it. Money is fungible, the claim that stooping is not getting money out of a zero-percent card isn't even right as a pedantic point, you switch your spending to the card and withdraw the cash from your current account.

You are saying, in effect, that if a mate owes you £20, gives it to a mutual acquaintance who then gives you two tenners, that you've not been paid back, and that instead you owe the intermediary £20 and are still owed by the first person.

That's not how money works.

[TLandCruiser]

I think they need to look at why consumers debt is so high, I think a major contributor is wage stagnation for the majority of the population since 2008

[Granfondo]

James_B said:

Granfondo said:

But it's not getting money out is it?
It's leaving money in your savings account and spending on your card?
So tell us again how you get money out of a cc for free?

Yes, of course it's getting money out of it. Money is fungible, the claim that stooping is not getting money out of a zero-percent card isn't even right as a pedantic point, you switch your spending to the card and withdraw the cash from your current account.

You are saying, in effect, that if a mate owes you £20, gives it to a mutual acquaintance who then gives you two tenners, that you've not been paid back, and that instead you owe the intermediary £20 and are still owed by the first person.

That's not how money works.

But that assumes you have the money already and the EG was "take out a 0% CC with a £10k limit (which in itself could be difficult) and put it into a interest paying current account!
If you don't have the money already how do you deposit it into the account unless you get it out off the CC?

[garagewidow]

hence my post a few days back about,..why bother getting the cc etc.

it smacks of financial phishing,drawing people in to transfer monetary data(cause that's what it is) between accounts,go spending and hoping that some card holders will either forget to make repayments or get out of their depth financially and end up in deep do do.

[Granfondo]

garagewidow said:

hence my post a few days back about,..why bother getting the cc etc.

it smacks of financial phishing,drawing people in to transfer monetary data(cause that's what it is) between accounts,go spending and hoping that some card holders will either forget to make repayments or get out of their depth financially and end up in deep do do.

Correct but we had a financial whiz kid who has now gone to ground who thought he had discovered alchemy.

[crankedup]

Granfondo said:

garagewidow said:

hence my post a few days back about,..why bother getting the cc etc.

it smacks of financial phishing,drawing people in to transfer monetary data(cause that's what it is) between accounts,go spending and hoping that some card holders will either forget to make repayments or get out of their depth financially and end up in deep do do.

Correct but we had a financial whiz kid who has now gone to ground who thought he had discovered alchemy.