Just don't understand

Bob_the_Saver

NickX wrote: »

But if someone owes significant funds at a high level of APR, applying for new credit at a lower (preferably 0%) APR is the best route to tackle the debt.

You are making the assumpton that taking out new credit agreements is getting people in further difficulties, but this is not always the case.

I totally agree but the institution they are applying to has the right to say NO " we will not give you an interest free loan" (ie. we don't make any money out of it) because we don't like the way you have conducted your finances in the past.
Transferring credit to somewhere with a lower rate of interest makes sense but many people (NOT ALL)then run up the credit again with the original institution.

never-in-doubt

nzseries1 wrote: »

It's very simple, Bob. Some people think credit is a right, and some people think credit is a privilege.

I think its a right to be privileged......

carlisleboy

In a way I agree with the OP, I'm always amazed when I read posts from people who have defaulted and missed tons of payments and expect to still get a mainstream card or low rate loan.

But it's not always as black and white as that. People's circumstances do change and suddenly they are in a well paid job etc.

Cell

It is not so much the original provision (or not, as the case may be) of debt which concerns me so much as what happens once that debt has been made available and used.

Once the lenders have you they can more or less do what they like without any effective regulation or even logic.

I have never, ever, understood the train of thought that says...

'My customer is indebted to lots of companies but has never defaulted. However I fear that he or she may default and be unable to pay back debts in the future. Therefore I will increase their APRs to reflect the risk of this happening. I am also aware that every other lender will probably be doing the same thing, and that our collective decisions are likely, in themselves, to significantly increase the chances of default. Oh and I might increase the minimum payments just to make sure'.

That's what they do. That's where they are evil. Essentially unregulated highwaymen.

Most of the complaints on here are about this behaviour, not the specific provision of credit.

ILW

Cell wrote: »

It is not so much the original provision (or not, as the case may be) of debt which concerns me so much as what happens once that debt has been made available and used.

Once the lenders have you they can more or less do what they like without any effective regulation or even logic.

I have never, ever, understood the train of thought that says...

'My customer is indebted to lots of companies but has never defaulted. However I fear that he or she may default and be unable to pay back debts in the future. Therefore I will increase their APRs to reflect the risk of this happening. I am also aware that every other lender will probably be doing the same thing, and that our collective decisions are likely, in themselves, to significantly increase the chances of default. Oh and I might increase the minimum payments just to make sure'.

That's what they do. That's where they are evil. Essentially unregulated highwaymen.

Most of the complaints on here are about this behaviour, not the specific provision of credit.

There do appear to be a pretty high number of posts on this forum from people who have been refused a new credit card or loan and are asking about their rights to appeal the decision.

Cell

Fair enough if that's the case. I suppose, being a relative newcomer, I've concentrated on the threads which I am interested in - ie resolving current debt issues rather than procuring new debt.

smiels

Bob is spot on. No-one is entitled to credit, a borrower can of course attempt to make a business agreement with a lender, but the lender must be able to make his decision based on the risks involved. (The main reason the banks are in the doodoo now is because they lent to people without bothering to assess the risks).
Welcome to the wonderful world of Nu Labour.
The Government and therefore the country is in a staggering, mind-numbing, inconcievable amount of debt. And so are many many people.
Our economic growth has been based on it for 10 years.
The whole notion of saving for something you want is now an oddity, people just pay on their credit cards with money they don't have.
It does make me angry. A couple the same age as my wife and I, live opposite my parents. Over the last 5 years they've had new cars, nice holidays, live in a much nicer house than me even though their income is about the same etc etc.
Last Sunday I visited my parents place and got talking to the bloke who lives opposite and he started bleating to me about his financial worries and that he could only keep his head above water as long as interest rates stayed rock bottom (another punishment for the prudent as we get almost no return on our savings).
He has a nicer car than me, a nicer house that he lied to obtain, he's had nicer holidays than me and all manner of luxuries that I've been unable to afford.
He obtained these by lying and also by spending money that he didn't have and next year I will be paying higher taxes in order to finance the debt the UK has been forced to take on to stop people like him being thrown onto the street.
The nation has lost all perspective and what really riles me is that the prudent, honest people are going to be dragged through the dirt to protect the greedy, !!!!less and dishonest.

CannyJock

smiels wrote: »

Bob is spot on. No-one is entitled to credit, a borrower can of course attempt to make a business agreement with a lender, but the lender must be able to make his decision based on the risks involved. (The main reason the banks are in the doodoo now is because they lent to people without bothering to assess the risks).
Welcome to the wonderful world of Nu Labour.
The Government and therefore the country is in a staggering, mind-numbing, inconcievable amount of debt. And so are many many people.
Our economic growth has been based on it for 10 years.
The whole notion of saving for something you want is now an oddity, people just pay on their credit cards with money they don't have.
It does make me angry. A couple the same age as my wife and I, live opposite my parents. Over the last 5 years they've had new cars, nice holidays, live in a much nicer house than me even though their income is about the same etc etc.
Last Sunday I visited my parents place and got talking to the bloke who lives opposite and he started bleating to me about his financial worries and that he could only keep his head above water as long as interest rates stayed rock bottom (another punishment for the prudent as we get almost no return on our savings).
He has a nicer car than me, a nicer house that he lied to obtain, he's had nicer holidays than me and all manner of luxuries that I've been unable to afford.
He obtained these by lying and also by spending money that he didn't have and next year I will be paying higher taxes in order to finance the debt the UK has been forced to take on to stop people like him being thrown onto the street.
The nation has lost all perspective and what really riles me is that the prudent, honest people are going to be dragged through the dirt to protect the greedy, !!!!less and dishonest.

Still, on the bright side, you'll be able to make him an offer for his car and house once the bailiffs move in on him