Consumers' debts rose in May, says Bank of England

joe_blotts

I think t's a bad thing. If people had money they would pay cash so it's obvious lots of people have no money and have to rely on credit. A claim on future earnings. Debt isn't prosperity.

The_White_Horse

the real issue is high house prices. they are insanely high. no one is lending. someone on 80k a year can barely afford a three bedroom semi in or around london. it can't carry on. no matter what happens the fundamentals are not there for it to carry on.

wotsthat

Graham_Devon wrote: »

Your opinion seems to be at war with itself, dependant on how you wish to view a certain issue.

Where's the conflict in saying I have a cautious attitude to debt but can see why bringing forward consumption isn't always a bad thing?

shortchanged_2

Graham_Devon wrote: »

The credit card one is difficult. Credit cards are the easiest, but most expensive credit. I can't imagine people with access to cheaper money using credit cards as a loan....unless they have no choice...so that would probably suggest struggling again...especially alongside the overdrafts.

Credit cards have one advantage in that they give the consumer an added level of protection. I think more people are becoming aware of this particularly during these tough economic times.

I put most of my major transactions on the credit card even though I have the money to pay for them, because you have more protection against company bankruptcy, failure to deliver etc.

Graham_Devon

shortchanged wrote: »

Credit cards have one advantage in that they give the consumer an added level of protection. I think more people are becoming aware of this particularly during these tough economic times.

I put most of my major transactions on the credit card even though I have the money to pay for them, because you have more protection against company bankruptcy, failure to deliver etc.

Yes, this is all true, but the balance on the cards is going up. We don't really know the turnover.

shortchanged_2

Graham_Devon wrote: »

Yes, this is all true, but the balance on the cards is going up. We don't really know the turnover.

So you could actually argue that people could be using credit cards more (like myself) because they are actually fearful of a companies financial position.

lippy1923

joe_blotts wrote: »

I think t's a bad thing. If people had money they would pay cash so it's obvious lots of people have no money and have to rely on credit. A claim on future earnings. Debt isn't prosperity.

I don’t entirely agree. Just because people use credit does not mean they don’t have the cash. Example- I pay for both my cars to be insured using my 0% credit card. I use this because I like my club card points, and I prefer to stick my £1k that I would have spent in one go, into a savings account for a year earning interest. I pay just over the minimum payment required throughout the year and then pay the rest in full, once I have received my interest.
I prefer to use my credit cards wherever I can for large purchases and always use these instead of paying cash where I can. Planned borrowing has always worked better for me

Graham_Devon

lippy1923 wrote: »

I don’t entirely agree. Just because people use credit does not mean they don’t have the cash. Example- I pay for both my cars to be insured using my 0% credit card. I use this because I like my club card points, and I prefer to stick my £1k that I would have spent in one go, into a savings account for a year earning interest. I pay just over the minimum payment required throughout the year and then pay the rest in full, once I have received my interest.
I prefer to use my credit cards wherever I can for large purchases and always use these instead of paying cash where I can. Planned borrowing has always worked better for me

Do you believe this is the case for the majority of the nation?

Generali

The_White_Horse wrote: »

the real issue is high house prices. they are insanely high. no one is lending. someone on 80k a year can barely afford a three bedroom semi in or around london. it can't carry on. no matter what happens the fundamentals are not there for it to carry on.

Correct.

When someone in the top 10% of earners is going to struggle to buy a nice 2 bed conversion in Clapham then you know something is wrong.

ukcarper

joe_blotts wrote: »

I think t's a bad thing. If people had money they would pay cash so it's obvious lots of people have no money and have to rely on credit. A claim on future earnings. Debt isn't prosperity.

Through my working life I never had the cash to buy a car so I took loans to buy them. I could afford the repayments and without the car I would have lost my jobs. So I don’t see debt as a problem if used wisely.