households are about £60 a month worse off than they were a year ago as rising inflation puts the squeeze on household budgets
London (PRWEB) July 20, 2011
As the economic crisis across continues to harass consumers, it is becoming harder to find ways to avoid credit card problems. But many people are discovering a solution through bad credit loans. These loan products are designed for people who do not have good credit and have difficulty getting loan approval from conventional banks. Lots of borrowers run into trouble when applying for credit cards, for example, or when looking for consolidation loans that will give them the cash needed to finally pay off their plastic.
Interest rates on credit cards are at an all time high, especially when compared to overall rates. But if a cardholder misses a payment then stiffer punitive rates take effect, and combined with fees and penalties that can make it nearly impossible to pay off a credit card. Within just a few short years the balance owed can double, making it harder to even make the minimum monthly payments. Lingering credit card debt and a lack of available credit can also torpedo one’s credit score and ruin a person’s credit history to intensify the stress and strain of an already challenging financial situation.
That kind of distress has widespread ramifications, too, that impact household budgets far beyond the original purchases or cash advances charged to credit card accounts.
- The Guardian recently published an article, for instance, explaining that British households are “about £60 a month worse off than they were a year ago as rising inflation puts the squeeze on household budgets.”
- According to recent income figures from Asda, spending power is the lowest it has ever been since the company started publishing such information.
- Families have less to spend than they did this time last year, too, while the cost of basic commodities like groceries and petrol go higher and consumer inflation increases at a pace more than twice as fast as average household earnings.
- Those who buy alcohol and tobacco are also paying more, because prices in those categories have spiked nearly 10 percent compared to this time last year.
- When monthly credit card debt balloons out of control it often forces homeowners to default on other debts, of course, and that helps explain why home repossessions are suddenly on the rise.
- According to a report from the Financial Services Authority, for instance, the number of new home repossessions recently climbed by 17 percent after they had dropped for nearly two years in a row.
People turned down for credit cards can get a prepaid or a secured credit card, but that kind of account either requires that cash be deposited ahead of time to cover expenses or it offers only a small line of credit. They cannot use that kind of account to effectively pay off existing debt, so without access to regular cash loans they find themselves stuck with credit card debt that continues to swell – even after they cut up their credit cards and stop using them.
But this kind of consumer is an ideal candidate for a bad credit loan, and they can use the product to get fast cash despite poor credit. Then they can pay off nagging credit card balances and penalties with their new bad credit loan, putting a stop to that vicious cycle of ever-increasing credit card debt. Loans for bad credit can also be used for any other purpose. Take out one of these user-friendly loans to pay for an unexpected emergency expense, for example, or to buy a car or even remortgage a home.