Could this be the way forward?

[ivoriva]

Sorry to hear that, but I am so pleased you have found someone else.

[Skippy]

Sorry to hear that Hunter, and I'm glad things are working out for you.

I have found out this year that there are more important things in life than money - my lovely uncle died of cancer and that really put things into perspective for me. Your health is so much more important than money.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[Marshalsea]

I thought about this a while ago and came up with the following:

1. Credit ageing. Credit card debt to be split on the statement by month, and monthly payments (after deducting interest) go towards paying the oldest debt first. If any debt is older than six months, use of the card should be suspended until that debt is cleared. At a stroke, this will stop people using credit cards for long-term debt finance - the biggest single source of credit problems.

2. Credit limit increases. Ban credit card companies from giving unsolicited increases in credit limit. One of my credit cards started out twelve years ago with a £2,000 limit. It ended up at £13,400, yet I never once asked for the limit to be increased. Customers wanting an increase in credit limit should go through a formal application procedure, give details of income and expenditure, and be subject to a fresh credit check. They should also be made to give a reason for needing the limit increased.

3. Total borrowing. A limit should be placed on the total amount of unsecured debt an individual can have, based on a percentage of annual take home pay (say 30%). It should be illegal for an individual to borrow beyond this limit, and illegal for a finance company to lend them the money.

4. Advertising and marketing. Ban all adverts for loans and credit cards which promote them as a way of buying things you cannot otherwise afford. Ban interest-free periods, low interest balance transfers and unsolicited mailshots (junk mail) offering loans and credit cards. Restrict loans to capital purchases such as cars and home improvements. Encouraging people to take out a three year loan to pay for a two week foreign holiday is insane.

5. Cash advances. Outright ban on cash advances using credit cards, and on credit card cheques. The main reason people take out cash advances on credit cards is to pay off other debts. This leads to the dreaded debt spiral.

6. Direct debits. It should be a condition of being granted a credit card that a direct debit is set up to pay the minimum monthly payment direct from the cardholder's bank account. No more missed payments (unless the DD bounces), no more late fees.

I think I might write to my MP about this. The finance companies would squeal like pigs, but once the dust settles they would have a smaller but more profitable business. Their bad debt write-offs would be vastly reduced, they could get rid of about three quarters of their call centre staff, they would still take their commission from retailers for use of the cards, they could (and probably should) start charging annual fees for the dubious privilege of holding a credit card, and they would still have all the opportunities for cross-selling of insurance and other products, which their customers would be far more likely to be able to afford...

Richard

[Adam Davies]

Richard
Some interesting points and I would agree 100 percent with the automatic raising of credit limits to be stopped.
The ability to withdraw cash should be limited but not stopped[it can be useful if you are marooned somewhere].
Are credit companies still asking for just two or three percent of the balance to be paid each month ? If this was raised to ten percent then people may think twice about spending.
Regards

Andy Davie
IVA.co.uk Spokesperson and site manager
(aka Neverending)

Please check out my blog: http://andydavie.blogs.iva.co.uk

View my profile here:
http://www.iva.co.uk/andy_davie_profile.asp

[MelanieGiles]

Yes - I too like the sound of some of those inititatives, but the thing to remember is that consumer debt funding is a minute part of most bank's overall bottom line, that the write-off issue is of no real concern in a booming overall economy.

We must also not go down the route of a "nanny state", which would hamper enterprise and inward investment. The key in my mind is re-education about basic household budgeting, and the implications of taking out unaffordable credit.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[freelili]

I agree, totally, we dont want a country of robots. The NHS stated as with a nanny state ethos and it didnt work. Education and informed choice was and still is the way forward, ie excercise, diet, smoking, better understanding, better health. However in regards to financial matters, the message is all one way, their way, ie, consolidate now, put all your money in one place, buy now pay later, get what you want now, home owner, (big white smile) CCJ's no object; together with images of idyllic family life after such a loan and what you can afford to buy with the left overs. And, how am I to know when the bank ring up every 3 months with offers to extend the loan? They know more about financial matters than I do? Before I realise I am in too deep, its too late and where do I go for help? I am reckless, stupid, ashamed and I keep it all to myself and try to manage hoping it will get better. Ciggarettes come with a warning,paracetamol and cold remedies come with a warning, loans and credit cards come with a halo, or an association with a perfect image. IVA's come when its too late and how many look much better on the telly than they are in reality?

LILY

I believe that angels breathe and love will live on and never leave. I cherish all you gave me everyday.

[DebtDummy]

I agree Lily, IVAs do appear a lot better on television than in reality. Remember my post about the Clampitts? lol We live in a society where people do not want to wait....for anything! Our parent's times,people had to wait and save for what they wanted. Our generation wants things 'now' and the sooner the better. Yes, creditors are at fault for lending money, large masses of money to anyone who is walking upright, However, 'we' are the ones taking it. We are the ones wanting the latest gadget or in home convenience or home improvements.

The creditors know how we think today and they play on it using every marketing ploy known. What we have to do is teach the future generations to spend wisely. To only buy what they need and let the wants be a wish list. It IS difficult to achieve this I know. I have two daughters and they want things that really do not make sense to me.

To give you an idea: a pink telephone like Paris Hilton's. Why? Because it's kewl, gives street creed. Now, how ridicules is that? Or how about a pair of shoes by Jimmy Choos? Why? Because they are kewl too. I told my youngest at £250 a pair they should come air conditioned. Ha!

Well, too late for us I am afraid, but the younger generation needs consumer credit education. It should be taught in school and be made mandatory. They should also be taught the effects of advertising on the subconscious mind.

I shall step off my soapbox now (smile).

All I have left is my humour.

View my blog http://www.debtdummybankruwoman.blogs.iva.co.uk.

[Skippy]

I am finding that I get more satisfaction now when I find a bargain than I ever did when I paid with credit. For example Dave and I are going to a Holy Communion next month and a christening later in the month (I'm going to be godmother so very proud!) and I wanted something to wear as I didn't think my usual jeans and t-shirt would do! This time last year I would have been prowling the shops, credit card in hand looking for something, regardless of the price, but I was so pleased when I picked up a dress for £10 in MK1 last week as I had found a bargain! And it suited me, which was even better!

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[DebtDummy]

Say MK1 is not a bad shop. Even an old girl like me can find something in there. As for being a godmother it's a great role.I have been one for 30 years. When you get tired of the little one, you can return him/her to his/her parents. lol

All I have left is my humour.

View my blog http://www.debtdummybankruwoman.blogs.iva.co.uk.

[Skippy]

Oh I love New Look, Mk1, Primark, Matalan etc - anywhere I can get a bargain I'm happy!

I had a lump in my throat when my friend asked me to be godmother, and as you say DD I can hand him back when it gets too much, i.e. nappy time!

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[DebtDummy]

hahahahha! Nappy time you hand him/her back. That makes me laugh! What if...just what if...the parent's aren't available? Uh huh, YOU have to change either the Atlantic Ocean or Dijon mustard.

All I have left is my humour.

View my blog http://www.debtdummybankruwoman.blogs.iva.co.uk.

[Skippy]

Yuck, that's disgusting! I've only ever babysat twice and my mum was called in to change the nappies!

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/