Credit Advice Identifies High Risk Consumer Groups
The national charity Citizens Advice is advising UK consumers to take charge of their spending habits and debt early in 2007. However, they admit that these are not the only causes of debt problems.
Last year Citizens Advice bureaux dealt with more than 1.4 million debt problems. This equals 5,300 debt problems every working day. The charity claims that these figures will rise in 2007. The question is who will be hit hard, and who will not feel the pinch. There is no logic to the numbers. Many high income households are petitioning for insolvency while millions of low income households are asset-rich and safe from a financial disaster. The answer is not in income, debt load, or employment. The answer is in money management.
Citizens Advice believes people pay a high price for their ignorance and ill-informed debt management and personal loan choices. Consumers who are unconfident when making crucial financial decisions are also in the high risk category. For many of these people, the Christmas debt ‘hangover’ will turn into a nightmare because these people will ignore the problem until it is too big to manage.
Ignorance is the number one reason why consumers are turning to IVA companies to find debt relief. This is the worst way to manage a debt problem, because the companies who advertise these ways make their profit from handling debt burdened consumers. These companies have everything to gain from indebted consumers and nothing to gain from financially savvy borrowers.