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Jun 21 - Britain Is in the Midst of a Massive Household Debt Crisis



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RAZAH CUTS  topics gone triple plat - Number 1 spot x83
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Jun 21 - Britain Is in the Midst of a Massive Household Debt Crisis
 

 
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In Britain, the cost of living is soaring. Millions have been forced to use credit cards just to survive — and have taken on crushing debt in the process. We need blanket forgiveness of that unjust debt.

Toward the end of last year, a trade unionist told me that a growing number of their members were increasingly reliant on credit card borrowing. At the time, the financial press was pointing to “increasing consumer confidence” and hopefulness about the “reopening of the economy.” But given what I had heard, I was skeptical that increasing confidence in the economy could be the cause of this extra lending.

Analysis of household surveys conducted by Debt Justice late last year confirmed that behind the boosterish headlines, things were getting worse for millions of UK households. An extra 1.3 million were pushed heavily into debt in 2021, even before Universal Credit was cut by £20, the Omicron wave, and the surge in the cost of living.

With inflation currently running at least three times the rate of benefits and double that of wages, borrowing is largely driven by need. Polling and analysis from the debt advice charity Stepchange confirmed that people are getting into debt to pay bills and make it through to payday, with households in the United Kingdom having taken out an estimated £13 billion of borrowing just to survive.

What forms of borrowing people turn to depends on how well different products are regulated and marketed as well as their availability, repayment terms, fees, and charges. It now looks increasingly like people are turning to credit cards, with the Bank of England reporting that in the last twelve months, credit card borrowing has increased by a record 11.6 percent, the highest since November 2005.

The household debt crisis is primarily a crisis of incomes: low incomes, insecure incomes, incomes that you cannot build a stable life around. Given this, it is wholly predictable that during the cost of living crisis, people are increasingly turning to credit to make ends meet.

The repercussions of heavy debt will last well beyond the media headlines. Linda, aged sixty-six, recently told me, “I’m hopeful that I will clear my debt by this time next year, forty years after the initial use of a credit card.”

Linda’s husband was controlling, and his actions pushed them into the debt she remained liable for after her divorce. “I tried over many years to get clear but, inevitably, it was like Sisyphus pushing a rock up a hill,” she said.

Having left her job as a teacher and becoming self-employed, she concluded that the only way out was bankruptcy. After the bankruptcy period was over, credit card companies encouraged her to take on lending again to “improve her credit score.” Due to her credit history, these new cards came with even higher rates of interest.

Linda tried to use them only in emergency situations, but “they have a habit of building up,” she said, since “it takes very little in the way of a financial problem or temporary reduction in income to cause the further use of the credit card . . . and so the cycle continues.’

Increasing numbers of people in the UK are now trapped in this cycle of heavy and persistent credit card borrowing, with as many as 2.8 million people paying more in interest, fees, and charges than in paying off the debt. Figures from industry body UK Finance also show nearly 54 percent of credit card balances are now incurring interest.

You cannot disconnect credit card borrowing from other forms of credit — and the warning signs on the dashboard are all flashing red. Last week, Citizens Advice published research showing that two in five “Buy Now Pay Later” borrowers are paying back these purchases with extra borrowing, most commonly credit cards. These sorts of juggling acts can only last so long before they come crashing down.

With heavier bills dropping on the doormat and bank accounts increasingly empty before payday, no one should be stigmatized for reaching for credit to keep the lights on, or feed themselves, or even just find some joy in their lives. Instead, we should be building an economy where no one is forced into making these difficult choices in the first place.

The first step must be to alleviate the pressures pushing household finances to the brink, which requires action to increase wages and tackle the soaring cost of goods. But support is also needed to help those who are already struggling with debt.

That is why we at Debt Justice are campaigning for a fair debt write down in the UK. We want to see a debt restructuring fund created by the Treasury and used to buy out personal debts which have often already been devalued and sold to debt collection companies at knock down rates. Every single person who gets pushed into unpayable debt deserves a chance to reset their finances and rebuild their lives.

visit this link https://jacobin.com/2022/ .. -crisis-credit
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44 comments
 

 3 days ago '20        #2
Xiox  topics gone triple plat - Number 1 spot x1
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Maybe the EU needs to get their own credit cards to regulate how much these card companies charge
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 3 days ago '18        #3
Ryo857 
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 Xiox said
Maybe the EU needs to get their own credit cards to regulate how much these card companies charge
I thought the UK wanted are out of the EU alà brexit

 3 days ago '20        #4
Xiox  topics gone triple plat - Number 1 spot x1
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 Ryo857 said
I thought the UK wanted are out of the EU alà brexit
I should of said Britain needs it's own cards
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 3 days ago '16        #5
00010111  topics gone triple plat - Number 1 spot x7
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Capitalism.
+18   

 3 days ago '13        #6
PCDubya 
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Corporations have been hoarding money for years. Now they have the money, combined with hedges to buy out damn near a whole market(housing). Actually pretty insane.
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 3 days ago '17        #7
Ymmot  topics gone triple plat - Number 1 spot x5
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Biden's Britain
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 3 days ago '07        #8
240ka  topics gone triple plat - Number 1 spot x1
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 Ymmot said
Biden's Britain
You know its Biden's fault. Lol
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 3 days ago '20        #9
Xiox  topics gone triple plat - Number 1 spot x1
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 240ka said
You know its Biden's fault. Lol
This goes all the way back GWB 2
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 3 days ago '17        #10
Ymmot  topics gone triple plat - Number 1 spot x5
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 240ka said
You know its Biden's fault. Lol
Of course, if trump was President Britain's housing market would be thriving, as well as the world market and the universe market. Trump was universe first.
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 2 days ago '20        #11
DrDisrespect 
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Trickle Down economics never worked. Rich n*ggas hoarding all the wealth while employees wages barely even grow,Some haven't even seem wage rises in years....while Firms use Oil or Inflation as an excuse to increase prices. Greedy Bastards mane

A fast food spot near me increased the prices 2 times already since January

fu*k Regan and Thatcher.

I used to just buy anything,Now I be thinking twice before I even buy anything.
+17   

 2 days ago '21        #12
Busterdog 
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It’s gonna be an interesting winter in Europe as once folk can’t eat and are freezing, you gonna need to expect them on the streets smashing sh*t up.
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 2 days ago '18        #13
Capodecina  topics gone triple plat - Number 1 spot x1
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sh*t will eventually hit the fan
Perhaps the powers that be will be held accountable

+16   

 2 days ago '19        #14
Amarula  topics gone triple plat - Number 1 spot x8
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 2 days ago '20        #15
APhiA 
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All true in the article, but seriously..,shorty went bankrupt from credit cards and after recovering and getting her credit score back up, what does she do?


Get back under credit card debt lol like damn it’s a cold world.

 2 days ago '17        #16
Ymmot  topics gone triple plat - Number 1 spot x5
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 Capodecina said
sh*t will eventually hit the fan
Perhaps the powers that be will be held accountable

Haven't I been telling you guys Malcolm X was a socialist? @

 2 days ago '17        #17
Mozzie  topics gone triple plat - Number 1 spot x8
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Threads like this is why I keep telling people this financial collapse will be worse than 2008. The entire world is facing the same problems right now which is why central banks all over are raising interest rates aggressively.
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 2 days ago '19        #18
Big Gurthy  topics gone triple plat - Number 1 spot x3
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When the funk hits the fan.

Smell like chitlins grits and ham. It’s gon get fonkay
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 2 days ago '15        #19
Jad95 
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To my economists:

Can I get 1 optimistic and 1 pessimistic projection of what all this sh*t means?
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 2 days ago '16        #20
00010111  topics gone triple plat - Number 1 spot x7
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 Capodecina said
sh*t will eventually hit the fan
Perhaps the powers that be will be held accountable

Being Brits they'll blame foreigners.

Those people are stupid like that.
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 2 days ago '16        #21
00010111  topics gone triple plat - Number 1 spot x7
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 Jad95 said
To my economists:

Can I get 1 optimistic and 1 pessimistic projection of what all this sh*t means?



Haven't seen any optimistic predictions by anyone credible.


Last edited by 00010111; 06-23-2022 at 10:13 AM..
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 2 days ago '15        #22
Jad95 
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 00010111 said



Haven't seen any optimistic predictions by anyone credible.
Damn, so what’s the projection?

 2 days ago '16        #23
00010111  topics gone triple plat - Number 1 spot x7
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 Jad95 said
Damn, so what’s the projection?
Recession worse than 2008.
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 2 days ago '17        #24
cabeast93 
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Hopefully this will bring a change. These conditions is why forms of socialism is our so popular. We all only have 1 life. Why do corporations need to rule our life’s.
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 2 days ago '15        #25
Prad Bitt 
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 Jad95 said
To my economists:

Can I get 1 optimistic and 1 pessimistic projection of what all this sh*t means?
A debt jubilee is long overdue but because of who runs the world will never happen. Best case scenario when things turn dire central banks reverse again so that employment and a*sets remain in tact but Hyperinflation will surely occur. Worst they finally allow the business cycle from 2001 to complete and we see massive deflation, layoffs, a*sets crushed, demand disappears, businesses shutter at a higher rate than Covid shutdowns, bank runs, etc. all bad capital will be cleared but will be chaos in the streets think dystopian.
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