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Encouraged Debt

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Encouraged Debt

Just had a call from the lovely people at Virgin MBNA offering me interest free balance transfers.
When I pointed out that I had no balances anywhere to transfer, the helpful chap went on to encourage me to use the interest free balance transfer to pay cash into my current account to spend.
Kinda makes you worry a little - I said no as I'm not interested, but many folks may be tempted after receiving such a call, especially if they are already finding things tough financially.
9 REPLIES
Community Veteran
Posts: 6,735
Thanks: 12
Registered: 02-02-2008

Re: Encouraged Debt

I get those offers regularly.
When there was no up-front fee I used to take them up, put the money in a high-interest term account and repay before any charges became due pocketing the interest.  Roll eyes
Nowadays you can still do that but it's rarely worth the effort given the 3% or so up-front charges.
N/A

Re: Encouraged Debt

Yet another financial institution in difficulty (Bradford and Bingley plc), which is the knock-on effect of a downturn in the economy and people getting over their heads in debt (is there any wonder?).
It is about time that companies who solicit people to take on loans that they can't afford are brought to book and new legislation brought in.
I imagine that the CAB is currently overwhelmed.
Also, in these days of rampant consumerism there should be more education of young people about management of finances and the dangers of excessive debt.
N/A

Re: Encouraged Debt

I also just got a text message from Virgin - also trying to persuade me that now is the right time to get into debt.
jmd
Grafter
Posts: 2,933
Thanks: 2
Registered: 30-07-2007

Re: Encouraged Debt

Until I used the Mailing Preference Service I used to get inundated with offers of loans - I could now owe millions if I had taken them up!  Stores are just as bad - and store cards have high interest, but when you get to till you get offered incentives to get into debt.
One of the worst stores for encouraging debt is Brighthouse but at least now they do make an effort to show the APR which they did not in past.
Community Veteran
Posts: 1,236
Registered: 02-08-2007

Re: Encouraged Debt

I am currently in debt management largely because of this (I do accept responsiblity for the holidays on the other side of the world!)
What really annoys me about this is today I was pricing the Cisco CCNA or maybe even CCNP but currently am now unable to borrow money for what is a good purpose. Really angry. Why did the banks give me so much credit when I was young and obviously stupid?! Now I am going to save for months for a Cisco certification. Would rather have gotten it and started looking for a higher paid job ASAP!
snozboz
Grafter
Posts: 384
Thanks: 2
Registered: 27-07-2007

Re: Encouraged Debt

Quote from: poppy
I imagine that the CAB is currently overwhelmed.

My Mum works for Leicester CAB, and says that they are finding that more people are coming to see them, and a greater proportion of their clients have debt-related issues, though she thinks these changes have been slow to happen so far but will get faster and more noticeable soon.
Incidentally, CABx nationally are struggling - it's getting harder to find quality volunteers who can commit to them for long enough to be worth training as advisers, plus they are not nationally funded (though people often think they are) and are finding it harder to successfully bid for funds.
Fancy volunteering some of your time?  I've been volunteering to help with their IT recently - you don't have to volunteer as advisers if you don't want.
</plug mode>
Martin
nadger
Rising Star
Posts: 4,498
Thanks: 46
Registered: 13-04-2007

Re: Encouraged Debt

Daughter already part time CAB adviser  Smiley
Wife has just got letter from Barclays. Great News - Apply today - £4,700 is waiting for you. £116.32/month for 60 months making total of £6,979.20 = 20.4% APR
Isn't it nice to be pre-selected - wonder what as Huh
madjbright
Grafter
Posts: 184
Registered: 09-06-2007

Re: Encouraged Debt

Quote from: nadger
= 20.4% APR

I am not convinced about the APR here. If you put the numbers in here it gives the APR as 9%.
nadger
Rising Star
Posts: 4,498
Thanks: 46
Registered: 13-04-2007

Re: Encouraged Debt

I've just put in £4500 with 60 payments of £116.32 and got 20.5% APR. Just shows how misleading Barclayloan letters can be as letter says £4700 reserved for you but illustration shows £4500.
Another load of paper for the shredder  Sad