I don't understand

[Iceni]

Anyone following this forum will know that everything apart from a house is cheaper in UK than France, cars, insurance, food, clothing, DIY stuff and so on so why then does every man, woman, child and domestic pet in UK have trillions of non-mortgage debt?

John

[Frederick]

Not every man and woman ..not in my house .My view is "If you cant pay for it .You cant have it ! " 

[velcorin]

Unsecured UK debt is calculated on last working day of the month. Credit card bills are not yet due, therefore include all personal credit card, store cards and corporate card balances which are settled in full. The figure is highly misleadinding, is general ignored, except by lazy journos who haven't got a clue, but need a story. As a side issue the UK is the only country to collect such data, and therefore there isn't actually any other country to compare with[;-)]

[Russethouse]

 I have CC debts every month - but pay them off in full each month too ( I use a card where there are useful rewards so use it for everything possible) I bet they are stil counted though [:)]

[Will]

Different cultures, rampant consumerism and easy credit will no doubt get the blame, with some reason, but as the posts above indicate, that's not entirely justified because there are many factors which can distort the true picture. I think it's also true that there are far more opportunities to spend money in England, at least compared with non-Parisian France.

[Frederick]

Only last week my wife was in a supermarket check out line when the woman at the till found her card would not work . After announcing she was at the maximum on her card people had to wait while she ran to her car and returned with another one that worked ... Some may have no choice but to eat off their credit cards if money is slow coming in .Next year I feel many more may be doing it when the cuts kick in .   

[velcorin]

Will. Lagarde did propose a central register last year for credit cards, but more importnatly "credit revolving". These are easy to obtain loans, where you just have to pay back the interest each month. I know people who have got several, because they don't declare on the application form their other loans, and that cannot be checked. Anyway, the idea was quietly dropped. The suspicion was that BdF had done an initial trial, and the numbers were so catastrophically bad, that it was a case of "ignorance is bliss". One thing I always admire the French authorities for...........if you don't want to know the answer, don't ask the question[:D]

One pertinant figure, is that France, does have the highest level of personal insolvencies in Europe. Which has always suggested to me that the level of personal debt is many, many times higher than officially acknowledged. Considering the ease of access non-bank credit, it would seem people, eventually, cannot meet all their obligations.

I think most British people are not aware, that in France, most personal finance credit is via non-bank means, the statutory rules do not apply. Just watch all the ads on TV for instant EUR5K loans.

[Gardengirl]

Like others, we use a credit card for most of our shopping, petrol etc and pay it off by direct debit each month - this morning in fact! We also use a 'reward' card, like RH, so that adds up nicely. I understand the outstanding sum each month counts in the nation's debt total.

It does concern me when I hear people who are 'spent up to the max' as they put it - I couldn't be comfortable with debt. Our offspring didn't get caught up in the spending that a lot of youngsters seemed to get sucked in to, thank goodness; they were brought up to be sensible spenders (or savers!), but youngsters usually have their own ideas once they get older, so that's something that pleases me a lot.

I'm not a big spender, and can't bear to get rid of things just because they're a bit old - we still have china and cutlery etc from when we got married; and if things have to go, there's freecycle waiting! But I do get tempted when I pop into town in UK and go into John Lewis and M & S; there aren't those tempations where we are in France!  [:)]

[Iceni]

[quote user="velcorin"]

One pertinant figure, is that France, does have the highest level of personal insolvencies in Europe. Which has always suggested to me that the level of personal debt is many, many times higher than officially acknowledged. Considering the ease of access non-bank credit, it would seem people, eventually, cannot meet all their obligations.

[/quote]

Perhaps this just means that the lenders in France are even more stupid than the lenders in UK. It must be a very thin line between lending to people who choose to borrow from a very high interest source and from whom you can make oodles of money in interest and fines versus a higher that average risk of default and write-off. Remember that there are no bad debts just bad lending.

Either way I must consider setting up a payday loan company. At an APR of better than 2500% this may even render my printing press in the sous-sol redundant.

John

[velcorin]

I wonder if some sort of urban myth has built up around UK personal debt? Certainly the personal insolvency statistics have stayed very low over the last 2-3 years, when, considering all the media hype you would have expected to see them spike dramatically. Mortgages in arrears more than 3 months (in a 3 year period) is around 2%, again low.

Certainly the data doesn't support the media stories. In fact there is a serious negative side at an economic, and social level, if personal debt is not incurred. Japan is the classic example, 20 years of stagnation, slow economic, and social, death. Finding the happy medium is would be good!

[Russethouse]

[quote user="gardengirl "]

Like others, we use a credit card for most of our shopping, petrol etc and pay it off by direct debit each month - this morning in fact! We also use a 'reward' card, like RH, so that adds up nicely. I understand the outstanding sum each month counts in the nation's debt total.

It does concern me when I hear people who are 'spent up to the max' as they put it - I couldn't be comfortable with debt. Our offspring didn't get caught up in the spending that a lot of youngsters seemed to get sucked in to, thank goodness; they were brought up to be sensible spenders (or savers!), but youngsters usually have their own ideas once they get older, so that's something that pleases me a lot.

I'm not a big spender, and can't bear to get rid of things just because they're a bit old - we still have china and cutlery etc from when we got married; and if things have to go, there's freecycle waiting! But I do get tempted when I pop into town in UK and go into John Lewis and M & S; there aren't those tempations where we are in France!  [:)]

[/quote]

 Bit of a nuiscance this time though - our rewards are in vouchers and the  voucher printing company  (of which there are very few) has gone down - so we can look forward to our vouchers at Christmas [Www]

[Gardengirl]

We obviously have the same credit cards, Russethouse! I've been thinking that much of what we'll need in December (I hesitate to mention the C word again!) will be taken care of with the overdue vouchers!  [:D]

[Pommier]

Not only are there not as many temptations to spend money in France, but there's also the issue of 'but what if it goes wrong...'. Customer service being as it is, we try not to buy anything which won't be rapidly consumed.

[Judith]

[quote user="Will"]far more opportunities to spend money in Paris.....

[/quote]

I've just come back from a weekend in Paris meetings English friends and managed to resist all the temptations - especially at Sacre Coeur when one of our party (who spent many years importing goods from Hong Kong) saying when we stopped to look at some of the many souvenirs on display - they're all imported from China! Rather took the gloss off them all!.

Except for food and metro fares, and a boat trip on the Seine (one must do tourist sometimes!) my only other expense was the hotel and the travel to get there.  It can be done!

[Will]

[quote user="Judith"][quote user="Will"]far more opportunities to spend money in Paris.....

[/quote]

[/quote]

No I didn't - what I actually wrote was: "..far more opportunities to spend money in England, at least compared with non-Parisian France"

Glad you had a nice time playing the skinflint in Paris, anyway.

[Patf]

[quote user="velcorin"]

I wonder if some sort of urban myth has built up around UK personal debt? Certainly the personal insolvency statistics have stayed very low over the last 2-3 years, when, considering all the media hype you would have expected to see them spike dramatically. Mortgages in arrears more than 3 months (in a 3 year period) is around 2%, again low.

Certainly the data doesn't support the media stories. In fact there is a serious negative side at an economic, and social level, if personal debt is not incurred. Japan is the classic example, 20 years of stagnation, slow economic, and social, death. Finding the happy medium is would be good!

[/quote]

Perhaps the low interest rates over the last year or so are part of the explanation.

We have a small UK mortgage, and I'm dreading the predicted rise in the bank rate.

[NickP]

Patf wrote: We have a small UK mortgage, and I'm dreading the predicted rise in the bank rate.

Just as well you didn't have a mortgage in 1988 then Pat, I did and was paying 16%. Funnily enough after paying all that interest along with lots of other people, our endowment policy's still didn't cover the original loans when they matured. [8-)]

[nectarine]

Interestingly it seem the more debt you have, the more you can borrow. We have no mortgage, good pensions, pay off the credit card in full every month but when I applied for an increased credit limit we were subject to all sorts of scrutiny because, apparently, we weren't listed as having credit elsewhere? I tried to argue that, surely that was a good thing, but apparently not. In the end we got our increased credit limit and still pay it off every month but we are not seen as creditworthy.

Odd, they think if you have a load of debt you can't pay off then they can chuck another load of money your way. But be tight with the purse strings and prudent, budget wisely and it is difficult to borrow!

Strange world.

[Judith]

[quote user="nectarine"]Interestingly it seem the more debt you have, the more you can borrow. We have no mortgage, good pensions, pay off the credit card in full every month but when I applied for an increased credit limit we were subject to all sorts of scrutiny because, apparently, we weren't listed as having credit elsewhere? I tried to argue that, surely that was a good thing, but apparently not. In the end we got our increased credit limit and still pay it off every month but we are not seen as creditworthy.

Odd, they think if you have a load of debt you can't pay off then they can chuck another load of money your way. But be tight with the purse strings and prudent, budget wisely and it is difficult to borrow!

Strange world.[/quote]

Quite.

And Will - I know I "misquoted" you, but it also followed on from the habits of overspending and credit debt. It is possible to not spend even in tempting situations.

And I too remember 15% mortgages - we survived, so what is happening is nothing now compared with that pressure..... especially as jobs kept disappearing too whilst the mortgage didn't .....

[Russethouse]

Not only was interest very high but we ad to queue for a mortgage, the 'short cut' was to take an endownment policy which is why so many people ended up with them!

 A couple of years ago  when Anthony Worrall Thompson was forced to sell most of his restaurants he said he wished he had borrowed more, like Gordon Ramsay, who apparently owed so much to the banks they let him keep trading in the hope they'd recoup the money - I believe even Gordon Ramsay has felt the pinch recently though

[Frederick]

I recall when mortgages were in short supply. At that time when I actually managed to get one I was advised by the Buildiing Society manager that. If my mortgage repayment  per month was more than my weekly wage ...I could not afford it ... Good advice .

[nectarine]

... to add to the nostalgia. When I first applied for a mortgage I was told "we don't give mortgages to single women as you have a habit of getting pregnant and not keeping up with the payments". Not so long ago as well ... 1978 that was. And they were within the law to refuse single women. I got a mortgage with the Abbey National instead and, within 4 months, it had gone up to 15% so I had to get evening and weekend jobs in pubs to fund this and keep my head above water.

My niece has a mortgage which has gone up and she is having trouble with the payments. When I suggested she cut her spending (don't take the planned foreign holiday) and get an evening or weekend job she looked as me in horror - "I couldn't possibly do that" she explained, apparently it would interfere with her social life!! She's still paying off her university debt, has this huge mortgage but has, this week, gone off to Turkey for a two week holiday. Oh, and she's just bought a new car.

Cripes, I feel old with old-fashioned values!!!

[Russethouse]

 Mr RH had two jobs when we first got married and actually for quite a few years afterward too.  The second job he would do from home but in the early days of our marriage I well remember him coming in the front door and going straight upstairs to the 'office' to start on the second job... I saw less of him than when we were courting.

When I suggested a second job to my daughter she was as horrified as nectarines niece......although she does support students on a course for a professional exam now, so that's something

[woolybanana]

The pressure of a mortgage was something I did not like, so went to Kuwait where I did three jobs, my then wife did one and we lived off her money. The mortgage was paid off in less than a year, we put excellent money in the bank and then, with our final summer money, did we have fun at Harrods sale.