Friday, 31 May 2019 17:05

Credit card defaults hit new high

People defaulting on their credit cards reached new highs in the first eight weeks of 2019. We were already acutely aware of the debt crisis in the UK and how people are dealing with it. But as opposed to people getting a check on their finances and putting things right, it appears that things are actually taking a turn for the worse.

The default rate jumped to nearly 23 per cent a couple of weeks ago. (The last time it was at this level was two years ago)

The figures are quite surprising when you take into account that at the back end of 2017, further credit card restrictions were put in place to help people struggling with debt. But, despite this, default numbers have gone up in since last year – meaning something else is at play.

We believe that credit card restriction alone isn’t enough to halt the nation’s debt crisis. People need to be more disciplined with their money. End of.

It may sound harsh, and we know there are people that are in debt because of circumstances out of their control, but on the whole, many people that are in debt are in that situation because of their own choosing, or because of their lack of self-restraint.

There’s articles upon articles on the internet which state that wages have not gone up in years. Surely this would mean that people are not spending as much and are saving at a rapid rate? You’d be wrong. Instead, people are spending more money in stores and shops than they have done in two years, all are driving around in PCP cars, and we’re hearing reports that people will be unable to retire because they haven’t saved sufficiently in the years when they were working. What?! All this spells to us is that people want the very best of everything, even when they cannot truly afford those things.

There has been a real shift in money mentality during the past couple of generations – and for the worst. Years ago people would have been proud to put the majority of their money away and boast of savings, nowadays savings mean nothing. So long as people are seen to have the latest gear, that’s all they care about.

When we read an article nowadays detailing the ‘plight’ of people in debt, we struggle to be sympathetic because we live in the real world and know the majority of people in this situation could get out of the hole they’re in if they simply made a few changes to their lifestyle.