“When you’re broke go and get a loan
Take out another mortgage on your home
Consolidate so you can afford
To go and spend some more when you get bored”
This morning I did a survey. Well they asked for “Mr Bowers” but I gave in without playing daft. I was struck by the number of questions relating to debt. “Do you have a credit card? How often do you pay of the balance? Every month? Wow, you’re good!” “Do you need a loan? Do you want to reduce the interest on your mortgage. Would you like debt counselling?”
Not once was I asked did I want to improve the interest rate on my long term savings, do I have an ISA, do I want advice on where to store my money.
Over 50% of people are responsible and pay off their credit card balances most months. Which leads me to my second quote:
“I do not borrow on credit cards. I have four young children. I give them advice not to pile up debts on their credit cards.”
The press have called it “doing a Ratner.” Matt Barrett of Barclays was said to have admitted that his product was more expensive than his competitors. You might not recognise the quote because wherever it’s been referred to it’s been paraphrased out of existence. Several people have changed the quote to claim Mr Barrett said he’d warned his children “not to use credit cards.”
Now hang on a minute. Are we saying “using” credit cards is synonymous with “piling up debts”. No wonder so many people have problems. Of course you shouldn’t pile up debt on credit cards. That is a bad idea, and ought to go without saying. Piling up debt is not the be all and end all of using credit cards. Credit cards are designed for short term lending, to ease purchasing, or get you out of a temporary tight spot. If you need to borrow money for longer, take out a loan, but not before you’ve sat down and had a good think about your spending habits. If the reason for doing this is not obvious, go and seek help. All Mr Barrett is doing in his statement above is stating the obvious.
Perhaps it’s the Scout leader in me. When I was at the homeless project, my mother remarked that she would never see if I had a pair of shoes for the project, as it was likely that my shoes would be worn out before I planned to get rid of them. Which is true, I see it as sensible. But my mother shouldn’t laugh as she brought me up not to want things immediately but to wait until I could afford them, the only thing I’ve ever gone into debt for was my current car, and even that didn’t stretch me.
But back to the survey. The woman on the phone asked if we owned our house, we do (at least Nicola does), then asked did we want to reduce our mortgage interest, to which I answered we didn’t have one. This didn’t appear to sink in, as she later asked what kind of mortgage I have.
Oh dear. We’ve gone so far I don’t think people noticed you were being sarcastic Shania.