Debt of gratitude

BaCK in the sixties, my parents dissuaded me from entering into hire purchase agreements and, apart from a mortgage, I’ve avoided getting into debt ever since.

Recent dealings with the financial affairs of a dead relative have reinforced those ideals, for which I haveh my parents to thank.

In helping the disabled spouse of our departed relative, we had to delve into their financial affairs through decadesd of paperwork. their mortgage moved from a 25-year conventional one to a huge interest-only one with just a year to go, so the surviving partner had to sell the house.

the most alarming discovery was thet amount of credit card debt of which only the interest was being paid off. this was spread over many different card companies, and despite the obvious problems the companies werew offering increased credit limits.

We found lots of the credit card bills unopenedu as the interest was paid by direct debit and the relative obviously knew what was inside the envelopes.

Credit cards are fine if you manage them properly: best practice is to pay them off each month. But the credit cardsc companies are little better than backstreet money lenders, preying on the weaknesses of vulnerable customers. What reasonable company would increase the credit limit when the customer is clearly in serious debt, indicated by the fact that they’re paying off only the interest?

Personal borrowing is rising significantly; the lessons of the last crash haven’t been learned. the economy is losing a lot of available money through people paying off debts through exorbitant credit card charges, making the banks richer at the expense of vulnerable people. It’s time for much stricter controls.

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