A Debt Can Be For Life – Not Just For Christmas

Christmas presents under the tree

Are you amongst the majority in Rochdale Borough that are worried about their Christmas debts?

The recent case of Tony and Michelle Meadows, the couple whose loan of £5,750 turned into an enormous debt of £384,000 in 15 years may sound extreme but many people face problems repaying what they have borrowed, often through no fault of their own.

“People are often unaware of what to look for when arranging credit and even if they read the small print they are still unsure of the true cost and the implications in missing a payment or paying late,” said Laurence Bell, Consumer Protection and Registration Service Manager for Rochdale Council.

To try to prevent cases such as this happening in the Rochdale borough, a new service was jointly set up by Trading Standards and the Council’s Advice Service earlier this year.

The Money Advice and Consumer Information service offers training and information on money and consumer issues to people throughout the borough.

This service compliments that provided by Rochdale Trading Standards and the Advice Service, both of which offer a confidential one-to-one advice service for people with consumer and money problems.

If you are worried about debts, using credit or your rights when buying remember:

For help or advice contact:

Rochdale Council Advice Service: 01706 865371
Email: advice.service@rochdale.gov.uk

Trading Standards: 01706 864186
Email: tradingstandards@rochdale.gov.uk

Citizens’ Advice Bureau:   Rochdale - 01706 666676
                                        Heywood - 01706 366139
                                        Middleton - 0161 284 0334 

How to Survive Christmas Credit!

Credit is not always a good option, especially if you are struggling to pay your priority bills, or are already in debt. If you feel you have to take on more credit, bear the following in mind:

Have a good look round to see what types of credit are available to you.  Shop around for the best deals and compare APRs (Annual Percentage Rates) to see how much the credit is costing you – in total – over the whole loan period.

Remember to make sure you can afford the repayments each week or month. Spread payments for presents over as long a time as you can, so lump sums don’t have to be paid all at once.
  
Interest charges on credit are worked out as the APR (Annual Percentage Rate). This tells you how expensive the loan will be. Often the APR is higher than the quoted interest rate and will reflect the true cost of the credit.

Secured loans are not usually a good idea as your home is at risk if you can’t keep up the repayments.

Try to avoid tempting credit offers in shops; they may be more expensive than they seem. Don’t sign any agreement before reading the small print.

Make a budget beforehand and stick to it.  Work out how much you have to pay out on all your essentials and ensure that all your priority bills e.g. rent/mortgage, council tax, gas, electricity, housekeeping, etc. are being paid.

Affordable? Decide how much you can reasonably afford to spend (and pay back) at Christmas and don’t go above this.  By doing this you are less likely to miss paying essential bills; that will need catching up with in the New Year.

Save for next Christmas:

• Put aside an affordable amount each week or month over the year.
• Consider buying supermarket savings stamps each week/month.
•  The local credit union – StreetCred -  allows you to save small amounts on a regular basis and offers low interest loans based on your savings.
• You could open a savings account at a bank or building society.