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Credit and Debt

 

credit & debt
Almost everyone borrows money at some time. Borrowing can be a real help in managing household income. It can help to deal with emergencies or unexpected events, can make larger purchases possible, and opens up opportunities which would otherwise be missed.

Borrowing can however, be a risk, particularly for people on low incomes who often find themselves paying more to borrow from home credit companies or other high cost loan providers. Some 70% of the people borrowing from the home credit industry at 150% APR or more are social rented tenants. Worse, some people may find themselves borrowing from unlicensed lenders or loan sharks.

Wherever people borrow, changes in life circumstances can interrupt income and leave people unable to pay their debts. People can also over commit – paying by card can distance people from the reality of payment, and though ‘buy now, pay later’ can seem attractive, paying later isn’t always possible. The consequences of being in debt include stress, and strain on people’s relationships and their ability to maintain a stable life.

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