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The British public are addicted to debt, according to shadow chancellor George Osborne. After Fool.co.uk declared that high interest rates on store cards means that they are “the devil in disguise”, the Conservative Party have pledged to help British consumers who are feeling the pressure of debt due to the lingering credit crunch.

The Conservatives claim that around £2.2 billion pounds worth of debt is owed on store cards alone, and the number of store card accounts has doubled to approximately 13.4 million in recent years.

If they come into power at the next general election, they vow to introduce a cooling-off period so that consumers cannot start using their store cards the moment that they have been approved. Furthermore, they plan to give additional power to the Office of Fair Trading to ensure that store card providers cannot charge any more than a 25% interest rate, as some store cards are currently charging as much as 29.9% APR.

George Osborne told GMTV that: “We’ve got a big problem in Britain, we’re addicted to debt and we are seeing the consequences of that as the credit crunch hits, and everyone is finding it more and more difficult with the rising cost of living.”

One of the results of the credit crunch means that more and more people are struggling to get their loan application accepted. The worry is that loan sharks are targeting those who are the most financially vulnerable. Consequently thousands of people could be forced to seek a loan from a loan shark because they cannot borrow money in a legal manner.

The New Local Government Network has warned that 35,000 more people will use illegal loan sharks as traditional loan sources dry up and their loan application gets turned down time after time.

Apparently 165,000 people already use loan sharks in the UK, and the organisation is calling for additional resources to be put into credit unions by local authorities, so that people who have been refused bank loans have an alternative source of borrowing which does not include loan sharks.

Chris Leslie, author of the report, commented: “There is evidence to suggest that the pernicious trend of illegal unsecured lending at extremely high rates of interest, or loan sharking, is making a comeback.

“The diminished availability of regulated sub-prime credit is creating conditions where a sizeable number of people have little option but to borrow from illegal sources.”

Mobile phone contracts can often be very expensive. Even when you think you have come across a great deal, you could be surprised about the hidden charges which seemed to get added on a monthly basis.

The credit crunch means that our household incomes are getting tighter, so it is becoming more important than ever to benefit from a great deal on your household services. Getting a great deal on your mobile phone contract does not have to be as hard as you think, as there are a number of networks which should all be fighting got your custom.

With a little research you could save yourself money on a monthly basis, which you could put towards paying off your debts.

Firstly you need to think about your spending habits, such as do you just use your phone to text, do you make a lot of international calls, and do you use any of the additional service such as WAP? Once you understand your own usage habits, you can begin to search the market and find a mobile contract which can offer you the best deal.

The best place to start when trying to find a great deal on your mobile phone contract is to look at the amount of free minutes and texts you can get and at what price. Remember to take your own personal usage habits into account; there is no point being tempted by free calls which you will never use. But, as a rule of thumb, the more minutes and texts you get for free then the less you are likely to have to pay on top of your contract. (more…)

Does it feel as though you are caught in a trap of credit card debt? And no matter what credit card debt repayments you make, your balance seems to go down?

You could be  a victim of the credit card debt trap thanks to the ‘negative order of payment’ method employed by many credit card lenders.

The ‘negative order of payment’ trick means that credit card lenders allocate any credit card debt repayments towards clearing your cheapest credit card debts first (those accumulating the least interest, which you might have acquired through a promotional balance transfer), and leaves your most expensive credit card debts (those accumulating the most interest, such as cash withdrawals) trapped on your credit card. This means your most expensive debt will be attracting extra interest until the cheapest debt has been paid off.

This method is used by many credit card lenders, meaning that your credit card debt may cost you more than you originally thought. For example, if you are benefiting from a 0% balance transfer but still had credit card debt on the card beforehand, you will be making the repayments towards you cheapest transaction.

So, are you a victim of the credit card debt trap? If you are unsure whether your credit card provider uses the negative order of payment method, you can check your latest credit card statement. By law, your credit card provider is obliged to make this information available.

Make sure that you read through the Terms and Conditions of your credit card closely. It should offer you more information about how your payments are prioritised.

“How can I avoid the credit card debt trap?”: The only way this can really be avoided is to make sure that you do not use your credit card for cash advances and that you pay off your credit card debt in full on a monthly basis. This means that you will not have to pay interest on your credit card debt.

If you are struggling with your credit card debt and it is unaffordable to you, there is credit card debt help available. One Advice are leading financial solutions experts. We could make your monthly credit card debt payments more affordable to you. If you want to see if you can benefit from a reduced monthly payment through a financial management plan, please get in touch. Our advisors are on hand to offer you the latest debt advice, call now on 0800 048 1752.

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Those with UK debts are aiming to become debt free, according research released by Equifax. Neil Munroe, external affairs director at the company, believes that more consumers are choosing to spend only what they can afford to, instead of taking on further borrowing.

These are linked with new figures from APACS (the UK payments association) showing that consumers are repaying more than they are borrowing, suggests that more of us wish to be debt free instead of building up unaffordable levels of credit card debt.

The reason for this is believed to be the current economic climate, with increased awareness of the potential future financial pitfalls, such as redundancy, which could limit debt repayments. Monroe comments: “Maybe there is an expectation that their job may not be as secure as it was and therefore people don’t want to be caught out with no job and [high] borrowing still.”

The average working adult is paying over £24,000 in shop-made sandwiches, based on £2.50 a day over a working period of 40 years.

If you are looking for a way to become debt free, it seems that making your own lunchtime sandwiches could be the start of you paying back your debt back that little bit faster. Research by Warburtons suggests that by just making one sandwich a week would reduce your lunch bill by £4,800, excluding the cost of the filling.

The average sandwich rakes less than three minutes to make, so ‘having no time’ is not an excuse. You could even make it the night before so you can snooze for those extra minutes.

Brits are thought to be spending about £600 a year for ready-made lunches. Jessica Bowker, Warburtons spokesperson, comments: “It’s no secret that we spend unnecessary amounts of money on ready-made lunches. But it’s staggering when you find out exactly how much is spent.”

It seems that more of us are thinking about debt management instead of saving for the future. According to Ark Financial Planning, more of us are deprioritising the need for saving in order to repay our debts faster.

The belief is the current economic climate means that more of us are likely to want to get our debt management under control, as we move away from the “debt is good” culture that was found in the UK prior to the start of the credit crunch.

These findings have been boosted by the results of the Nationwide Savings Index who report that less than one in five of us now believe that it is a “good time” to save.

Chartered financial planner for Ark Financial Planning, Philip Stevenson,  commented: “I think we are in a position now where people are more concerned with paying off debt rather than saving. It’s got to be a good thing to reduce the debt levels. That’s a more attractive proposition than saving anyway.”

Personal debt levels is a big problem in the UK, with many of us finding that our debt is increasing and we have very little or no savings. It is important to have good control over your finances so that you can take control of your debts and boost your savings.

Below gives you some Debt Warning Signs which you might want to look out for. The credit crunch means that our finances are stretched more than ever, but the good news is that there is debt help available. One Advice can offer you further debt advice about a range of debt solutions – call our debt advisors today on freephone 0800 048 1752.

1: You don’t understand your finances – If you are unsure of how much money you have in your account, unsure about your true level of credit card debt and are unsure about what interest rates you are paying, then it is true to say that you do not understand your finances.

Your debts could be much higher than you originally thought and you could be paying a sky-high rate of interest, so it is important that you take control of your basic finances.

2: You can’t seem to save – If you are not saving but feel as though you should be affordable, then it is important that you tackle this debt warning sign head on. Saving means that if the unexpected happened, such as car costs or being make redundant, you have available funds to see you through this rocky period.

3: You are a constant credit card user – The fact is that getting into credit card debt is much easier to get into then get out of, and if you are constantly using your credit card to pay for essentials then it is likely that you are masking a much deeper debt problem.

It can sometimes be a sensible idea to use your credit card to pay for goods online, as this offers you extra protection incase something goes wrong with the transaction. But failing to repay the debt at the end of the month means that you are building up your debt levels on a monthly basis.

4: Robbing Peter to pay Paul… - If you are borrowing money to pay the debt that you already owe, either by making this payment by credit card or getting a further loan, then you could find yourself stuck in this continuous cycle of borrowing which is going to land you further into debt.

If you recognise any of these debt warning signs, please do not be afraid to get debt advice. Struggling with your finances does no longer mean that you will have to declare yourself bankrupt and there are a number of debt solutions available. Get in contact with one of our debt advisors today on 0800 048 1752.

You may not think that recycling can help with debt management, but it really can. By recycling not only are you doing your bit for the environment but you could also earn some extra money which you can use to pay off debt.

Here are some top tips to take control of debt management by recycling your unwanted goods, and please feel free to comment and add your own too.

1: Recycle Clothes – Do you fear a shoe avalanche every time you open your wardrobe or is it filled with clothes that you would never dream of wearing again? If so, recycling your clothes is a great way to make money. There are a number of websites which allow you to sell your clothes online and most are free to join. It is likely that you will have to pay a small percentage for each item you sell but you can use the rest to pay down your debts.

2: Recycle your old mobile phone – These days technology is moving so fast that you are likely to have an unwanted mobile hiding away in one of your drawers. You can make money by recycling your mobile and there are a number of different websites to choose from. Make sure you do your research and go for the one which will give you the most for your phone.

3: Recycle your read books - Try Greenmetropolis.com for selling your unwanted books. You make £3 for every book sold and it is really simple to use; all you have to do is enter the condition of the book and the ISBN number (usually found on the back of the book near the bar code) and your site will up up online and ready for sale.

According to research by APACS, there are more credit cards in the UK than people! For the 60 million people in the UK, there were 73m credit and charge cards by the end of 2007. With these high numbers of plastic cards floating around, it is no wonder that many of us are looking to reduce our credit card debt.

Using a credit card is not always a bad thing, using it in the right way and in reason can offer you additional benefits. For example, a credit card can offer you more protection when purchasing an expensive item online.

But using your credit card unwisely could land you in a lot of credit card debt which you may find is becoming more unaffordable on a month by month basis. If this is you then our following tips to reduce your credit card debt could come in handy:

1: Pay off your credit card in full – This is the best way of reducing credit card debt, as one of the reasons why it may become unaffordable is the amount of interest which is added to your debt. By following this top tip you can reduce your credit card debt by avoiding interest payments, potential late charges and increased rates or fees.

2: Set up a direct debit – Missing payments to your credit card can land you in further credit card debt due to the late payment charges which are added and it can also end any introductory interest rates which you have with your credit card provider.

To reduce your credit card debt, ensure that you set up a direct debit to pay at least the minimum amount off your credit card. Once this has been set up there is nothing stopping you paying more or, if you are following the above tip, paying the credit card debt off in full and at least you don’t have to worry about missing the payment date.

3: Avoid the ATM – Cash withdrawals with your credit card are never advisable as the majority of credit cards attach a higher interest rate to these transactions. Also, because many credit card providers ensure that you pay the debt with the lowest interest first, your original transaction could be very costly indeed.

4: Don’t be afraid of credit card debt help – If your credit card debt is truly unaffordable then the above tips will not solve all of your credit card debt problems. One Advice are a debt solutions provider and we could be able to lower your monthly payments to your credit card debt.

If you are looking for ways to reduce your credit card debt payments, please get in touch with one of our One Advice debt advisors on 0800 048 1752 or fill out the Quick Enquiry form to the right for a free call back.

If you are thinking about getting an Individual Voluntary Agreement (IVA) or are in the process of getting your IVA application accepted, one key bit of debt advice is that you may have been asked to switch bank accounts to one who is not on your IVA creditors list.

You should be aware that many finance houses are linked (owned by the same company), so be very careful that you are not opening up a new bank account with a linked company. You can avoid this problem by getting a basic bank account with us – Call now for further information about our IVA bank accounts.

An IVA will affect your financial status, and some people worry that if they have an IVA (or declare bankruptcy) they will not be able to get accepted for a bank account in the future. But there are IVA bank accounts which are otherwise known as a basic bank account. This allows someone with an IVA to have the basic banking facilities.

Like a normal bank account, an IVA bank account will still allow you to pay your wages in and you will have a cash card which you can use to withdraw money. There will not be any type of credit facilities with IVA Bank Accounts, as part of your IVA agreement is that you will take no further credit.

If you do not have an IVA but struggle with debts, this type of basic bank account could be right for you. As these bank accounts have no overdraft facility you cannot go overdrawn, therefore you can only spend what is available.

One Advice: IVA Bank Accounts

If you have an IVA, or are looking to get a new bank account, One Advice can help you.

We can guarantee your acceptance for a bank account as long as you can offer us proof of identity and address. There will be no credit checks and you have access to your account 24/7 via an online account.

With your new IVA bank account, online you will be able to:

• Make payments to bills, transfer money and set up standing orders.
• Check your balance.
• Put rules in place on your card and account.
• Request a new PIN number or second card.

For further information about how to apply for one of our IVA bank accounts, please call our IVA team on freephone 0800 048 1752.

If you have multiple debts which you are struggling to make payments to, it is important that you know which ones to tackle first, as the creditor which may shout the loudest should not always be the one which you pay. Debt Management for Prority Debt is one of the most important things.

Priority debts are debts which have serious consequences if they are not paid. For example, your mortgage payment classes as a mortgage payment as failure to pay means that you could risk losing your home to repossession. As you can see, it is important that priority debts are given this priority status over your other debts, as it is essential that you keep a roof over your head and electicity in your home.

If you are struggling to afford your priority debts because you are paying too much to your unsecured debt, including credit cards, store cards and overdrafts, One Advice can help assist you with debt management which will help you to meet your priority debt payment.

Priority Debt Guide

One Advice have put together a priority debt guide which goes through all the key aspects of ways to deal with your priority debt. Here you will find a wealth of information about a range of priority debts, including: (more…)