Issues With Borrowing Money And Debt Management

People have always been in debt. There will always be borrowing and many don't consider a mortgage to be debt – but of course it is. If your property was to half in value and you had a 100% mortgage then the bank would still want their money back – and rightly so. However, just because borrowing has become more difficult does this mean that people are no longer getting themselves into debt problems like they were a few years ago? I think not and here is why...

I have 2 credit cards. I used to use them a lot but now I don't. They used to have a large amount owing on each but I have managed to reduce the balances massively on them both now so there is very little outstanding. So, I'm in a good position with my credit cards – I owe hardly anything on them so therefore my debt is low and I'm not paying a significant amount of interest. I'm sure I'm not alone in this situation.

Here's my point though. I can borrow up to £7,500 on Credit Card 1 and £6,000 on Credit Card 2. I'm not going to – but say I was to suddenly use all this money and treat myself. I would then owe £13,500 and with a minimum payment of 3% a month I'd be paying £405 a month – with the majority being interest. Now let's say I now lose my job, let's be honest, many are at the moment. I'd be absolutely stuck and be seeking debt advice urgently – possibly even debt management.