Reckless Lenders

Richard_S

cinnabar wrote: »

That's probably true, but speaking from experience, I never once lied on an application form, all my creditors knew exactly how little I earned. I take responsibility for applying for credit and for not saying no to credit limit increases, but I honestly thought that if the bank was offering me the credit, they thought I could manage it. Naive, very.
The bank I had my student account with actually increased the limit of my credit card to 8 grand while I was a student - they knew my financial position very well. I took a graduate loan out to pay that off (for the record I didn't use the whole limit!), struggled a year later and went to them for help - their solution? another loan, on top of the first, that meant they were getting 50% of my wages each month.

I do think that somewhere along the line the bank should have said, right, you're obviously not managing very well, so we're not going to lend you any more. But the staff are on high targets and honestly I think many if not most of them think about their targets more than whether or not you can really afford to borrow the money - I've worked in a bank for the past few years and have seen the pressure sales staff are put under! I'm not even sales staff but there is enormous pressure on me to generate sales leads and I'm constantly badgered to approach people to talk about getting loans, credit cards etc.

Having seen first hand how pushy banks expect their staff to be when selling credit, I can't say I'm terribly sympathetic to them when some customers can't pay it back. Obviously I don't think anyone should deliberately borrow money with the intention of not paying it back, and I do realise that some people being unable to pay puts the interest rates on borrowing up for everyone else (or at least that's what I've been led to believe!) but the banks aren't the ones losing out in all this.

Hi cinnabar,

I'm rather weary of people saying that bankrupts make borrowing more expensive for everybody else.

How about a different perspective: bankrupts make borrowing cheaper for everybody else. One doesn't need to be an economist or acountant to appreciate that the more customers a company has the less it's overheads are per £1 of sales.

So, throw money at everybody, to reduce the unit cost, and those individuals, for whatever reason are unable to repay the capital, find themselves in a bankruptcy court.

Their assets are sold on, and a percentage of their earning taken each month, by way of compensation and the banks and credit card companies continue to post huge profits.

The net effect is, that people who do repay their debt are subsidised by those that don't. If borrowing was more discriminatory, and vast numbers of people were rejected for credit, the ones who were, would have to shoulder a bigger percentage of overhead in terms of higher interest rates.

That theory is more coherent than any political initiative launched in the last 10 years; with the exception of the EA 2002.:D

Richard

Broken_hearted

Gaz1971 wrote: »

Does anyone else feel that the lenders are as much to blame for their debt as they are themselves? Since I notified my card companies I was broke 6 weeks ago they have bombarded me with offers of loans and credit cards. During my time with the cards they would always keep upping the credit limit even though I was only paying the minimum payment each month and obviously stretched to my limit. Its a fair point when people say 'Well you shouldnt spend it' but I feel its also a case of it shouldnt be so easy to get the credit in the first place

When they up your limit you say no put it back down, when they send you junk mail bin it.

wherediditallgo

Broken_hearted wrote: »

When they up your limit you say no put it back down, when they send you junk mail bin it.

That kind of statement is akin to a rich man saying he could live on £50pw - very easy to say when you're not in a position where your decision is of critical importance at the time. Some lenders make bad decisions & so do some borrowers - hindsight is 20/20. In a perfect world, no-one would be in debt & no-one would need credit. And then you wouldn't be posting here. But it's not a perfect world, is it?

Broken_hearted

No I blame me, I didn't watch what DH was doing I didn't check and when things went belly up we just got more credit. I'm still in a position where I could take out more credit. It's not my money I'm struggling as it is so I won't spend it.

Richard_S

Broken_hearted wrote: »

When they up your limit you say no put it back down, when they send you junk mail bin it.

Bursts into song: "I'm just a boy who can't say no".:rotfl: :rotfl:

Broken_hearted

Richard_S wrote: »

Bursts into song: "I'm just a boy who can't say no".:rotfl: :rotfl:

Women on the other hand can mostly because we have a headache;)

Richard_S

Broken_hearted wrote: »

Women on the other hand can mostly because we have a headache;)

Not when they're in my company Broken hearted;:D I'm the ultimate cure for headaches and banks that haven't met their lending targets. :smileyhea

moneysaver1980

Richard_S wrote: »

Hi Gaz,

It's a 50/50 split; you can't have a reckless borrower without having a reckless lender; tis just a fact of life.

I dont think thats true, are you saying you were 100% honest on all the credit you ever got ?

Richard_S

moneysaver1980 wrote: »

I dont think thats true, are you saying you were 100% honest on all the credit you ever got ?

Were the banks 100% honest in following their guidelines for best practice when offering those credit facilities?

moneysaver1980

thats not really answering the question Richard is it