If you must do it, do it carefully

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Not advice from a driving instructor or reference to something of a more personal nature, but equally sound advice to take on board if you are thinking of using credit.

With the use of ‘plastic’ eclipsing cash as the most popular form of transaction, and the nations indebtedness reaching an all time high, there’s no denying the popularity of credit and store cards.

There will inevitably be times of unavoidable crisis and unplanned expense that finds the monthly budget, wanting. Failed washing machines and cars or more serious life events can find a lot of us reaching for the convenience of credit cards to help us weather the financial storm.

Convenient it may be, but is it the best and least expensive source of finance? If you need extra money, explore the options offered by your banks, building society or mortgage provider. It will generally cost you less but interest payments are inevitable.

Interest Free credit offers a great way of saving money on household items, but be sure to comply with your agreement or be hit with the very thing you were hoping to avoid - interest charges.

Another way of avoiding interest charges is that if you do need to use your cards, simply pay back the due amount the very next month.
Yes, blindingly obvious, but all too frequently, opting for the minimum payment becomes an early warning sign, leading to missed payments and the decline into debt crisis. Missed payments can also be read as risk indicators by creditors and adversely affect you future loan applications.

Creditors know theses early warning signs and the predictable pattern that emerges. Fortunately, it’s equally visible for you to see, so self-diagnose.

If missed or minimum payments are part of your way of dealing with debt or if you are paying off one card using another, then you now need to seek some impartial advice.

Whatever you do, don’t be seduced by the advertising of the ‘one-loan-fix’ offered by high interest charging debt consolidation companies. Instead, just open your mail, confront the reality of your situation and get some help and advice.

There are a number of sources of free specialist debt advice including the Citizens Advice Bureau and maybe your employer provides employee assistance or welfare facilities that include debt advice. Organisations such as Payplan also provide free access to qualified debt advisers on a freephone number.

The straightforward advice is to use credit sparingly and ideally, try to avoid it becoming a habit.

There are often lower interest options with both cards and high street lenders, so be sure to shop around for best value - the internet is a great time saver and the personal finance sections of newspapers often contain analysis of the current best loan and card interest rates.

Having a credit card does not mean you don’t set a budget or spending limit, so take some time out, look at your monthly outgoings then set yourself an affordable limit.

If necessary, read the early warning signs - minimum payments are the wake- up call for you to respond to and take control of your finances. Ignore it at you peril.

So, if you must do it, use credit carefully and try and make any mistakes you make small, manageable and affordable.

Advantages of using a Free Debt Management Company

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As the levels of individual debt in the UK rises, people are struggling to repay what they owe. More and more people are using Free Debt Management Companies like Payplan and CCCS to deal with their creditors on their behalf.

As many people find themselves struggling to keep up with the repayments on various outgoings, credit cards and loans, they are finding they cannot afford to make full payments to all their existing agreements. There are a few things that could help the situation.

Contacting the creditors directly and explaining your financial situation can help, and some creditors may accept a lower monthly payment or even freeze the interest for a certain period of time to help you try to resolve your problem.
In most cases, before they will do this they will ask you to send them an income and expenditure form so they can see the full situation for themselves.

Some people do not know the right levels of expenditure that most creditors allow for on the Income and Expenditure form, so if filled out incorrectly, creditors may not accept this and keep charging interest and demand full payment from the individual.

According to Rachel Duffey, Payplan Acquisitions Director "Many people do not think of everything that they need to put on their Income and Expenditure. In a lot of cases people overlook outgoings like haircuts, medical prescriptions, school fees, clothing and television license. This can leave some people a little short of what is a sustainable amount to live off."

Many creditors like the fact that these companies to not charge their clients fees, meaning they receive 100% of the money paid. These free services are made possible because some of the creditors make donations so that these companies can keep on providing this valuable service by helping people to repay their debts.

So why does the credit industry sponsor these companies to deal with their clients?

People who find themselves in a position where they are unable to pay their monthly-agreed repayments, more often than not, will either bury their heads in the sand or try to borrow more money rather than talk to their creditors. If a debtor stops making their repayments and does not contact their creditors, then the creditor will go through a recovery process in order to get back the money that is owed to them.

This costs the creditor money, therefore, if a third party can be involved who the debtor can feel at ease talking to, then the creditor can be made aware of the debtors situation and repayments arrangements can be made.

This means, the creditor is getting paid and the debtor is paying an amount they can afford. To sponsor a third party proves to be successful to the creditor and the debtor, and is a less expensive route, all round.

Love you to Debt?

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Bank balances can cause failed romances

Love may be in the air this Valentine’s Day but Payplan, one of the UK’s leading providers of FREE debt advice and debt management, reveals that many relationships suffer due to debt problems. Payplan’s research* shows:

  • Almost two in five couples whose relationship had broken down blamed debt as a significant factor.
  • For one in four couples, debts are the biggest cause of arguments
  • Two in five people have lied about how much they owe and almost one in five have lied to their partners about being in debt
  • Two in five people receive help from their partners in paying off their debts
  • If almost two out of five people found out just prior to their wedding that their intended was £30,000 or more in debt, they would not go ahead with the ceremony. 50% would have doubts about marrying someone so deeply in debt

John Fairhurst, Managing Director, Payplan said,

“One of the first questions we ask people is whether their partner is aware of their debt problems. 10% of our clients haven’t told their partners. Although people often hide the truth about their debts to avoid embarrassment, the strain this places on their relationship can be enormous.”

“But whether you choose to tell your loved-one or not, it is important that you recognise your debt problem and take sensible proactive steps to change your circumstances. It is not easy to make this realisation but one phone call to Payplan can be a great relief. Our highly trained advisers will carry out a full assessment of the person’s finances before negotiating with their creditors to reach an affordable, flexible, repayment solution and in many cases can convince creditors to freeze interest and charges.”

“The benefits of sorting out a debt problem are often much wider than the obvious financial ones.”

Payplan can help consumers come to an affordable flexible monthly repayment schedule with their lenders based on what they can afford after a realistic income and expenditure has been assessed. Their payments are re-evaluated regularly through Payplan’s customer care programme, so that any changes to their personal circumstances can be taken into account.

For an individual overview of their financial situation, consumers can access the Debt Calculator or phone the Payplan Helpline on 0800 917 7823.

* = Research was conducted via an online poll on the Payplan website. Figures are based on 900 respondents.

Payplan
John Fairhurst, Managing Director
01476 539200
john.fairhurst@payplan.com

Notes to Editors:

Payplan has a proven track record within the credit industry, having offered free debt solutions for over fifteen years. Its good reputation is reflected in the active referral of clients by organisations like National Debtline and Citizens Advice Bureaux.

Payplan is one of the country’s leading debt advice agencies; with over 10 years’ experience in helping people with their debt problems. It is recommended to the employees of companies such as Marks & Spencer, and by national organisations such as the Royal College of Nursing, Police Forces and Unison

Payplan will make a full assessment of a caller’s situation and recommend a course of action. It also provides free advice on bankruptcy, County Court Judgements, Joint and Several liability and other risks associated with debt.

Payplan advisers can be contacted on 0800 917 7823. Telephone lines are open 8am to 9pm Monday to Friday and 9am to 3pm on Saturdays. Case Officers can also arrange to call clients back at a convenient time and place. All information is treated in the strictest confidence.

Recovering from the cost of Christmas

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Payplan reveals 45% are still paying for presents bought for Christmas 2002

Payplan, one of the UK’s leading providers of FREE debt advice and management, encourages those who are experiencing difficulty in meeting their post-Christmas debt repayments, to look at alternatives to fee-charging debt managers and debt consolidation services as a way of controlling their festive debts. Payplan’s service has no hidden charges or management fees so every penny goes towards paying off consumers’ debts as quickly as possible.

For many people, the cost of Christmas celebrations may be too much on top of existing debts from credit cards, store cards, loans and hire purchase. Payplan research has found that almost half of respondents pay for more than 40% of their seasonal expenses on credit. The prospect of struggling to pay off Christmas debts along with all other outstanding bills can be extremely stressful - with 45% still paying for presents bought for Christmas 2002.

The research, carried out before Christmas 2003, revealed that 74% of respondents intended to spend £700 or more, yet only 4% had saved the full amount of their expected spend. Mounting debt also impacted people’s enjoyment of the Christmas season, as 60% felt pressured or worried, due to Christmas spending.

“Although debt consolidation companies may seem to offer an ideal solution to mounting debt after Christmas, consumers are basically paying one loan off with another, thereby not actually ‘freeing’ themselves from the debt trap”, says John Fairhurst, Managing Director, Payplan. “However, Payplan knows how important it is to make repayments that reduce consumer’s debt. It is frustrating and pointless if they are paying high interest or management fees that effectively increase their debts.”

Payplan can help consumers come to an affordable flexible monthly repayment schedule with their lenders based on what they can afford after a realistic income and expenditure has been assessed. Their payments are re-evaluated regularly through Payplan’s customer care programme, so that any changes to their personal circumstances can be taken into account.

For further information, consumers can call Payplan’s free helpline on 0800 917 7823 or complete and submit the Debt Calculator form for a free assessment.