The Department of Trade and Industry has introduced strict new guidelines to try and help consumers understand debt. To make sure everyone in the industry knows they are serious, the DTI plans undercover raids on money lenders.
The guidelines include rules that insist on lenders making interest rates and payments clearer, together with providing schedules of repayment.
Our View
The amount of debt held by the general public seems to be spiralling out of control. This is not surprising, given how easy it is to take out loans and credit cards. Only today, one of the directors at has five emails guaranteeing me credit cards and loans.
As a consumer, you must understand that when interest rates rise, debts become more expensive. Can you really afford the debts you have, without taking more on? Consider the implications of higher interest rates and shop around for the best deal.
In our view, these new guidelines will not do anything to tackle the consumer debt problem. The easier it is to get credit, the less people will think about the implications.