October in review: a snapshot of the finance stories you need to know
We bring you this month's most important stories in credit and finance.
Christmas season is fast approaching and soon many of us will be getting ready to celebrate with friends and family. For Brits this can often be an expensive time, with many of us spending on presents, food, treats, new outfits and bigger tables for the big day. But we might not be getting the best deals on our spending. The news over the last month shows that poor financial literacy could mean many Brits are paying unnecessary interest on their purchases.
Do you know what LOL means? What about OMG? You probably do, but it was revealed that us Brits are more likely to understand these words than important financial abbreviations. Nearly 80% of us know that LOL means ‘laugh out loud’, while only 17% know what LTV means – it’s loan to value ratio. Not knowing these terms is worrying as it indicates we aren’t being savvy financially enough. It’s important that we are armed with the correct knowledge to properly manage our finances.
It has been reported that married, home-owning women in their forties are now the most in danger of having money problems. This group of Brits are prone to spend on store cards, which tend to have high interest rates. Worryingly, the average debt of women in their forties who sought help from PayPlan (a debt solutions company) was £37,500 compared with the overall average for all groups of £28,900. Using credit isn’t a bad thing, but it is important to make sure you go in with your eyes wide open and are able to repay credit on time. If not, it could adversely affect your credit score, stopping you from getting access to the best deals in the future.
It appears that it’s not just women in their forties who are facing money problems. Nearly half of 18 to 25 year olds have debts other than student loans and mortgages. On average they owe £3,109, according to GoCompare, twice as much as their parents thought. The young are particularly vulnerable when it comes to taking out lines of credit, as they haven’t had time to build up a good credit score. This means that they often have to pay more for their credit.
It was also revealed earlier this month that in the run up to Christmas, many shops are pushing store cards with high interest rates. For those that spend £500 and make only the minimum payments, it would take over 13 years to repay. These cards may seem alluring with attractive introductory offers, but it’s essential to look into the details closely. Often you won’t find the best deals using store cards, so you need to check what’s available on the market.
We know that a lot of Brits will be using their credit cards to pay for Christmas this year. This isn’t a problem, if these are used carefully and you’re paying a fair price for them. To make sure you don’t overpay this Christmas, you need to get financially engaged and manage your finances effectively.