Hi,
I was reading and hearing about people complaining about the interest rate hikes on various credit cards over the past couple of months... Personally if I could make one policy change in government it would be to [FONT="]severely [/FONT]restrict the amount of personal credit (mortgages are a separate discussion). I firmly believe that if you don't have the money you should save until you have and should have the philosophy of having a savings buffer for lifes eventualities.
My perspective, and it's the way I was raised, is to cut your coat to suit to your cloth. I think it is broadly agreed that things are going to remain very tough for the next several years. And that people are going to be continued to be squeezed more and more due to a static (at best!) wage with increasing taxes and increasing mandatory expenditure such as energy costs, car tax, etc. With that in mind I think more people need to adjust their lifestyle to suit their new financial outlook. I also think, like unsustainable mortgages, people should be limited from getting into a debt spiral by limiting access to it.
An alternative way to look at it is to imagine someone has a credit card limit of 5k. I know of people who treat this as the hard limit and continually have their balance at e.g. 4.5k but when approaching their limit they rein in further expenditure. So there is a floor... if they do not have a credit facility then this floor shifts to 0 but everything else remains the same.
Therefore raising interest rates is certainly one way to make credit cards less attractive. Thoughts?
I was reading and hearing about people complaining about the interest rate hikes on various credit cards over the past couple of months... Personally if I could make one policy change in government it would be to [FONT="]severely [/FONT]restrict the amount of personal credit (mortgages are a separate discussion). I firmly believe that if you don't have the money you should save until you have and should have the philosophy of having a savings buffer for lifes eventualities.
My perspective, and it's the way I was raised, is to cut your coat to suit to your cloth. I think it is broadly agreed that things are going to remain very tough for the next several years. And that people are going to be continued to be squeezed more and more due to a static (at best!) wage with increasing taxes and increasing mandatory expenditure such as energy costs, car tax, etc. With that in mind I think more people need to adjust their lifestyle to suit their new financial outlook. I also think, like unsustainable mortgages, people should be limited from getting into a debt spiral by limiting access to it.
An alternative way to look at it is to imagine someone has a credit card limit of 5k. I know of people who treat this as the hard limit and continually have their balance at e.g. 4.5k but when approaching their limit they rein in further expenditure. So there is a floor... if they do not have a credit facility then this floor shifts to 0 but everything else remains the same.
Therefore raising interest rates is certainly one way to make credit cards less attractive. Thoughts?