Debt, Credit Repair, Mortgage, Loans, and Credit Card Advice » credit crunch

Beating the Credit Crunch

admin — Sat, 23 Aug 2008 08:08:30 +0000

If you have noticed that your money isn’t going as far as it used to, even compared to a few months ago, you aren’t alone. The current state of the economy means that prices are rising and income is largely staying the same, which isn’t good news when it comes to making ends meet.

But is there anything you can do about it?

Luckily there is – and it means being smart about what you do with your money and how you manage it on a daily basis. Saving a small amount of money on a daily basis might not seem like a lot, but when you add it up over the course of a month you might be surprised at the results!

This is the key to battling rising prices. You may not win every battle and the gains you make may only be small ones, but when they are added together they can make a difference.

The problem is, we all waste money to a certain extent. We’ve all been out shopping and spotted something we’d love to buy… and then we’ve bought it and decided we’d worry about how to pay for it later. That’s the worst way to battle the credit crunch, because money that you didn’t need to spend could have contributed towards paying essential bills or ideally put in a savings account to act as a cushion against future rises in prices.

Budgeting will of course help you to combat unnecessary spending, but the best skill you can have on your side is to identify how you behave with money, and learn new and positive habits to make sure you can take positive action against the credit crunch.

Take a look at your outgoing bills each month as well. Gas and electricity prices are going up, but you can combat them by switching to a new supplier if you find a better deal. The same goes for every other household bill, including your mortgage. The time you spend searching for better deals will be worth it when you reduce your outgoings from the amount you are currently paying.

Make sure you look at every aspect of your monetary situation as well. If you have a car there isn’t a lot you can do to reduce your car tax, unless perhaps you get a smaller car; but you might be able to reduce your car insurance by shopping around. If you have access to the internet you will usually be able to get a lot of services cheaper simply by booking them or arranging them online.

And don’t forget your credit cards either. If you are paying a high interest rate it might be beneficial to try and move your balance to another card altogether – it can save you more in the long run.

But whatever you do, make sure you keep an eye on your finances as being in the know is the best way to stay in control of them during tough times.

Credit Crunch Loan Sharks Warning

admin — Thu, 27 Mar 2008 05:29:56 +0000

If any of you are old enough to remember the effects of the last major recession in the late ’80s and early 90′s, you will recall that with the collapse of stock market prices in 1987 even greater than the ‘great recession’ of the 1920′s. For several years after, personal savings, along with many stock-market related investments, suffered badly, leaving many families very short of cash.

In the UK this recession not only sent house prices tumbling, but also inflation, which had been running at around 4.2% in 1987, climbed to over 9.5% in 1990. People’s savings were hit in every way conceivable because of this.

So many families ended up being out of pocket for many of the essential of life, including food, turned to the ‘doorstep loan shark’ for instant money, not realising the draconian penalties that were attached to many of these loans. Interest payments sometime greater than 100% were being charged, and sometimes enforced by men in black wielding baseball bats.

But those days had long since gone forever we thought, especially with the advent of buckets of ‘cheap’ money being offered to the consumer from every angle, whether from high street banks, credit card companies virtually forcing you to take on 0% interest rate credit cards, and low interest refinancing on your own home … or so we thought.

Now with this global credit crunch happening in a deeper and more threatening manner squeezing the very liquidity out of main stream banks, facilities like 125% mortgages on homes have disappeared, first time buyers are going to have to stump up bigger and bigger deposits, and more and more credit card companies are cutting back on your card spending limit, or in cases like EGG, cancelling well over 100,000 credit cards.

With this lack of liquidity between banks means that more and more consumers are being squeezed out of any available mainstream credit and this foretells the return of the doorstep lender, with interest rates around 100% in many cases.

Now in the UK at least this in itself is not illegal, believe it or not, but the trouble will come when authorised ‘friendly societies’ that offer a genuine helping service to people in need will get mixed up with the old-style loan shark, with ludicrously high interest rates (100% or even more), plus all sorts of nasties if payments are not made on time.

The moral of the story has to be that increased indebtedness is going to be more prevalent over the next few years, but you should really look at your options carefully – even bankruptcy, rather than fall into the clutches of these parasites that will bleed you dry.