Debt advice * cheap mortgages * stop repossession * credit card arrears * low interest loans * debt advice * money saving ideas * financial problems * debt consolidation loans

Once credit card arrears start to mount up you know you have serious financial problems because the high interest and charges really eat into your monthly income. A debt consolidation loan is often the solution but a remortgage with a cheaper rate of interest is also worth investigation and could stop the eventual repossession of your home.

Start of article about debt problems

Increased competition means that lenders can't afford to be so choosy about who they will lend money to. It used to be impossible (or at least very hard) to get a loan if you had any kind of credit problems - things like missed payments on loans or mortgages, previous bankruptcy, or county court judgements. But now there is a whole sector of the finance industry (the so-called sub-prime market) which is expressly aimed at satisfying the borrowing needs of people with an adverse credit history.

Because giving a loan, mortgage, or any other form of credit to someone with credit problems is seen as riskier for the banks, they can justify charging higher rates of interest on their sub-prime products - thus increasing their profits further.

Some people feel that by lending money to people with a history of debt problems and constantly bombarding us all with offers of loans and credit cards, the lenders are exacerbating the debt problems in this country.

Years ago I had first hand experience of how the banks' desire to keep lending us money can lead to problems. I was a student at the time earning about £50 a week from a part-time job. My girlfriend and I decided to pool our meagre savings and book a last minute package holiday to Cyprus. We worked out that between us we had enough money to pay for the holiday and give us about £500 spending money for while we were out there.

The credit limit on my Visa card was £500 at the time so my plan was to pay for all our meals and drinks on the credit card while we were away, safe in the knowledge that once we'd spent up to the £500 credit limit, the card would automatically stop working.

It was a pleasant surprise when we found that the credit card was still working come the last day of our two week holiday. Great, I thought, we've stayed within our £500 budget.

A less pleasant surprise came when my credit card bill dropped through the letterbox a few weeks after we got home. The bill came to over £900. Enclosed with it was a letter from the credit card company saying that due to the sudden increase in the use of my credit card, they had decided to increase my credit limit to £1000 - without checking with me first. And of course, that was how I'd ended up being able to run up a credit card debt of over £900.

So, who was at fault? Was I to blame for not keeping a more careful check on what we were spending during our holiday? Or was the credit card company to blame for increasing my credit limit without letting me know and thus "encouraging" me to get further into debt than I had planned?

I'll let you decide. But what I can tell you is that, as a result of that incident nearly fifteen years ago, I have rarely used a credit card ever since.