Double the debt of the rest of Europe!

Storm · 27 September 2006 at 9:22AM

Well, on the news this morning they were saying how the British have twice the amount of debt as the rest of Europe (excluding mortgages) and the average is £3000 per person (hmm, I'm a bit more than that!)

The annoying thing about how the BBC were reporting it on Breakfast News for me was that they spoke to their 'city' person who was saying that all our spending on credit cards was good for the economy! GRRR! :mad: I get so annoyed that a report like this comes out - perhaps everyone should be sitting up & taking notice, but a 'financial expert' on TV is basically saying that spending on credit is good for the country!!! It's just encouraging people to not worry about that £2K they've got sitting on credit because they're below average!

What does everyone else think?

loopyloulou_3 · 27 September 2006 at 9:40AM

i saw that too and thought it was irresponsible to say that it is good for the economy for people to spend on credit. It def made £3k sound like an acceptable amount to have on a CC and to not worry about getting it paid off.

Did you see the thing about pawn brokers too?

Graham_Devon · 27 September 2006 at 9:49AM

3k average means infact, those in debt are on average, higher than 3k.

An average is looking at the whole country. Millionnaires, those with no debt and then those with debt. So look at Mrs A with 6k debt and Mrs B with 0 debt and 340k in the bank. Average of those 2 people is 3k.

So infact, although it sounds like the majority of those who have debt average out at 3k, it don't.

Unless of course it was only looking at those who had debt (not including mortgages). But the way it was put across was using the population, not just the population who actually had debt.

Storm · 27 September 2006 at 9:50AM

Didn't see anything about pawn brokers - I'm guessing it was along the lines of 'they're doing a roaring trade'

lilac_lady · 27 September 2006 at 9:57AM

All it would take is a rise in interest rates to send many people over the edge of their financial cliff. Martin is doing a great job helping everyone to have their lightbulb moment. Credit cards should be renamed debt cards.

nomoneytoday · 27 September 2006 at 11:32AM

Graham_Devon wrote:

3k average means infact, those in debt are on average, higher than 3k

True.
The City gent was also correct at a simplistic level - borrowing to buy something means the business selling the product sells more stuff and makes a larger profit. They then pay staff to run the store. Those people pay taxes rather than claim the dole. They need a warehouse or shopfront, which means they pay rent, heat, light etc. This rent then goes to someone to pay off his mortgage / loan, so the BS employ more people to process the funds. The heating bill payment helps the Gas company employ more people, who drive more vans. These vans use diesel which means the petrol stations can employ people. And so on etc

climbgirl · 27 September 2006 at 11:41AM

Yes, it is a rather scary fact that the UK has the worst debt in Europe. I have a friend who married a French guy and moved to Paris about 6 years ago. She said the difference in attitudes to money and debt is just astounding. They don't really have credit cards in France, certainly not to the extent they do here. People save for holidays, things they want (shock horror!), they don't take out debt much at all. The average length of a mortgage is 8-9 years, not 25+.

It's certainly changed her financial behaviour for the better!

Double the debt of the rest of Europe!

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