Can the current economic climate be partially blamed on the credit culture we now adopt??

The idea of saving money for that all important purchase is becoming a distant memory for all but a few people, particularly if you are aged between 25 and 44.

Despite the economic downturn, and difficulties being experienced by millions, provision of credit has evolved into a whole new animal.

With the increasing popularity of the internet, it’s no longer necessary to go to your bank to borrow money.

Huge numbers of companies have sprung up offering loans at extortionate rates of interest to those members of the public who are in a financial downward spiral.

The most increasingly popular of these being payday loans; borrowing a relatively small sum of money, which is repayable in full on your next payday, with representative APR sometimes as high as 2,500%.

Is this just serving to delay an already deep rooted financial problem that ought to be resolved rather than put off?

It would seem in my mind that, in most cases, if you have insufficient funds with which to last to the end of this month, and you borrow money from next month’s budget, a further, and more significant, problem is bound to be experienced next month.

With Christmas now upon us, I anticipate vast numbers of people turning to these easy access high interest loans, in the hope of ‘putting off the inevitable’.

Citizens Advice Bureau warned the number of people running in to debt through payday loans has quadrupled in two years, and this is set to increase.

Whilst bankruptcy rates countrywide appear to be reducing, the south west is still seeing substantial numbers of people struggling to meet their ongoing commitments.

My belief is that bankruptcy rates will sharply rise in the New Year, with such issues as payday loans repayments, Christmas credit card bills, bank charges etc.  This problem will also be compounded for those running a business when the January self assessment tax deadline passes, especially with the slowdown in HMRC agreement to time to pay arrangements.

The message remains the same, take action now to protect yourself and your family from being caught in the downward debt spiral.