- 1 hour ago
Category
📺
TVTranscript
00:00.
00:0535 million of us have a credit card and the amount we're borrowing is rising.
00:10Fast.
00:11I have always a great castle put about.
00:15Five, six, might even have seven, I don't know.
00:17But millions struggle to pay them off.
00:20It just escalates and escalates the debt because you can't get out of it.
00:25Do you feel like you're a failure?
00:26We share tips on how to avoid unnecessary debt.
00:30The minimum payments will mean that you're really never getting out of debt.
00:35We investigate the dangers of easy credit.
00:38It's really easy to go.
00:40From zero to tens of thousand pounds of credit card debt.
00:43And lenders facilitate that.
00:45And why checking your credit score might make you a target.
00:50For even more lending.
00:51You're getting these emails now even though you're trying to pay off.
00:55The existing debts?
00:56Yeah.
00:57Wow, that's really, that's a lot.
01:00Thanks.
01:01Thanks.
01:02Thanks.
01:05Thanks.
01:06Thanks.
01:11Credit cards are part of our everyday lives in the UK.
01:13We now make more than $20.
01:1512 million credit card transactions a day.
01:18And they can be extremely expensive.
01:20Particularly at traditionally expensive times of the year.
01:25How much do you use your credit cards?
01:28Like on holiday maybe.
01:30Or before I get paid.
01:31Or before I get paid.
01:32Or before I get paid.
01:35Credit cards allow users to spread the cost of purchases.
01:38Without having to apply for a loan.
01:40Debt on a credit card is usually cheaper than an overdraft.
01:45Credit cards also offer free protection for some purchases.
01:50If your product or service doesn't arrive.
01:52Yeah.
01:54Mainly.
01:55For online shopping for me.
01:56I only ever use the credit card online.
01:58And some even have.
02:00For online shopping for large parks.
02:01Like Air Miles or Cashback.
02:03The annual.
02:04The annual percentage rate, or APR, including fees and charges,
02:09can range from zero to more than 60%.
02:12But for people with an average of $1,000,
02:14average credit history, it's typically about 25%.
02:19I've arranged my own funeral and put it on interest-free credit card.
02:24Are you confident you'll be able to pay it all off in the interest-free period?
02:28Providing I don't...
02:29Oh, yes.
02:30If you pay off the bill promptly, usually within a month, there's...
02:34There's no interest to pay.
02:36Do you pay off your balance in full?
02:38Yes.
02:39Because I know what the rates are otherwise.
02:44I've been a financial journalist and author for 15 years.
02:47I've also worked...
02:49Right now, average...
02:54Card interest rates are at their highest for 20 years.
02:57Each month, nearly...
02:59Half of accounts that charge interest aren't paid off in full.
03:02And that...
03:04Can lead to problem debt.
03:07James Daly.
03:09Affairer Finance, an independent consumer advocacy group, is worried...
03:14Our credit card debt is growing.
03:17Together, we owe 78...
03:19Billion pounds.
03:21Household debt has been a problem for a long time, but...
03:24It's been growing because the cost of living crisis has meant that household finances are squeezed.
03:28People...
03:29People's costs have been going up, and so the only way to make ends meet...
03:34In some cases, is to take out some debt.
03:37Debt can then be with you for an...
03:39Incredibly long time.
03:44Screenwriter Michael Cromson used credit cards to bridge gaps in his...
03:49Screenwriter Michael Cromson used credit cards to bridge gaps in his...
03:49Screenwriter Michael Cromson's income for years.
03:50I had a very good credit rating because I owe my...
03:54Own property, and although I was self-employed I was...
03:57Earning good money so I was being offered...
03:59credit cards left, right and centre.
04:01I took out lots of different cards.
04:04And when you have a mortgage to pay and you have lots of kids to pay for, you know, you
04:08use it as a sort of...
04:09Each month, you can pay off anything but...
04:14...between the full balance or what credit card companies call the minimum payment.
04:19Sometimes, just 2% of what you owe.
04:23The rest of the debt on...
04:24...on your card is carried forward.
04:28When Michael's work...
04:29...started drying up, he began making only minimum payments.
04:33I've...
04:34...to reach a limit.
04:35With each of the cards, I'd be paying the minimum.
04:37I wasn't paying off the capital.
04:39And instead of saying, stop there, Michael, they would increase the limit.
04:44Which would give me that slightly bigger breathing space.
04:47Oh, that's great.
04:48I've got a bit more to spend.
04:49Which of course, over the months, I got higher and higher up on those limits.
04:54And then, his circumstances changed.
04:57Two years...
04:59Two years ago, my wife wanted to end the marriage.
05:02And we went into a divorce.
05:04And that...
05:04...that was costing me a fortune.
05:07And it also coincided on...
05:09...and unfortunately, with lack of work, there was just less work coming in.
05:14And again, it was like...
05:15Oh, God.
05:16That's just...
05:17...just the worst nightmare.
05:19Yeah, really.
05:20Michael ended up with 21,000...
05:24...of debt across three cards.
05:27I've got to the point where...
05:29...I was having to find five or six hundred pounds a month...
05:32...just to pay the...
05:34...minimum payments.
05:35It just escalates and escalates the debt because...
05:39...you can't get out of it.
05:41And I realised last March, April...
05:44...I'm in trouble.
05:47I couldn't afford it.
05:48I just couldn't afford it anymore.
05:50And you just tumble.
05:51Do you feel like you're a failure?
05:52It feels like...
05:53I can't...
05:54...admit to this.
05:55Who do I admit this to?
05:56It's like something that happens inside you.
05:59That hurts.
06:00You...
06:01You put it...
06:02You put it away.
06:03But it's there.
06:04You put it away.
06:06Charity National Debt Line helps more people...
06:09...in credit card debt than any other form of borrowing.
06:14We see that lots of people are only making the...
06:17...minimum payment on their credit card each day.
06:19And what that means is over time...
06:21...the balance isn't coming down very much.
06:23So your debt...
06:24...is growing or staying the same.
06:26But you're paying a lot in interest.
06:28The Financial Conduct Author...
06:29...is about 2.8 million UK adults...
06:31...that are in what we call persistent credit cards.
06:34So that's when someone has paid more in interest...
06:37...over a certain period.
06:39...then they've actually paid towards...
06:40...the balance on their credit card.
06:42So that often means you can...
06:44...get sort of trapped in credit card debt...
06:46...and find it hard to get out of that.
06:50Grace Brownfield says the credit card industry...
06:52...profits from something that...
06:54...those in the know call anchoring.
06:57By displaying a minimum payment amount...
06:59...on bills, it encourages many consumers...
07:02...to subconsciously identify...
07:04...that as the ideal payment amount.
07:07In effect...
07:09...incurring what they pay...
07:10...to the suggested figure.
07:13There's some evidence that...
07:14...that encourages people...
07:15...to only make the minimum repayment...
07:17...even if they could afford to...
07:19...to pay more than that.
07:20And obviously by only making...
07:21...the minimum repayment...
07:22...people are paying more in...
07:24...interest typically.
07:25And that's where the credit card companies...
07:27...are making their money off that interest.
07:29...that as...
07:34...there are some simple things you can do...
07:35...to avoid problem debt.
07:36Tip 1.
07:37Minimum payments...
07:39...may seem appealing...
07:40...but...
07:41...if you don't pay off...
07:42...the full balance each month...
07:44...it's the credit card companies...
07:46...that profit.
07:49Michael went to National Debt Line...
07:52...and Citizens Advice...
07:53...for support.
07:54He's currently selling his house...
07:56...and plans to use some of that money...
07:58...to pay off...
07:59...with his credit cards.
08:00I absolutely know...
08:02...it's my responsibility...
08:03...to try and...
08:04...to pay those debts...
08:05...and I want to pay those debts.
08:06I'm 66 now...
08:08...and...
08:09...I've got to find a way...
08:10...of...
08:11...moving into retirement...
08:12...of...
08:13...whether I'll be able to...
08:14...to afford a house again...
08:15...I don't know...
08:16...but...
08:17...I've got to do it.
08:19...and...
08:20...debt-free.
08:21In 2018...
08:22...the credit card...
08:23...the credit card...
08:24...company's regulator...
08:25...the Financial Conduct Authority...
08:27...was so worried...
08:28...about...
08:29...the levels of...
08:30...persistent credit card debt...
08:31...that it set out...
08:32...new rules...
08:33...to drive...
08:34...the numbers down...
08:35...before giving out...
08:37...new cards...
08:38...or increasing credit...
08:39...lenders were told...
08:40...to make sure customers...
08:42...could afford their payments.
08:45But since then...
08:46...the number of people...
08:47...in persistent debt...
08:48...has dropped...
08:49...only slightly.
08:52I do like this.
08:54...it's got some nice bass.
08:55Dr. Tom Richardson...
08:57...is an academic...
08:58...
08:59...who studies...
09:00...the impact...
09:01...of being in debt.
09:02Credit card debt...
09:03...is linked to kind of...
09:04...a range of different...
09:05...mental health problems...
09:06...but depression in particular...
09:07...it weighs on people...
09:08...you know...
09:09...can make people...
09:10...really depressed...
09:11...really anxious...
09:12...people can feel...
09:13...hopeless about...
09:14...whether they're gonna...
09:14...pay off.
09:15Lenders have a legal duty...
09:17...to support...
09:18...vulnerable customers...
09:19...and help them...
09:20...avoid financial distress.
09:23Tom.
09:24...has bipolar disorder...
09:25...known to be associated...
09:27...with impulsive spending.
09:29...can help them...
09:30...we'll try slowly...
09:31...to be alive, but...
09:32... muito flourish.
09:33...and kept smiling...
09:34...and gettin' friends...
09:35...is like...
09:36...its interesting...
09:37...of coisas certo?
09:38it was probably the worst one ever.
09:43So this is the guitar store, it's a great place, great local shop and this is a...
09:48one of the shops I came to when I was really unwell.
09:53There wasn't anything in particular I wanted but the moment I came in I saw this...
09:58big 90s sort of beat processor sequencer with a floppy disk drive and it just looked really...
10:03really cool.
10:05I brought a ukulele, oh and a bass guitar.
10:08He didn't stop there, he went online and spent...
10:13more than £3,000 on instruments, all on his credit card.
10:18When you're manic, when you're impulsive it just doesn't feel like real money, yeah.
10:23It was really, really out of control.
10:27When his manic...
10:28episode subsided, he'd almost reached his cards £7,000...
10:33I borrowed some money from my parents, you know, at my age I had to borrow money.
10:38to pay off a couple of grand of the debt.
10:41Tom's bank didn't query.
10:43his erratic spending.
10:44After his episode, he told them about his condition.
10:48But six months later, Santander increased his credit limit.
10:54The bank emailed me and said, we've increased your credit limit...
10:58The bank emailed me and said, we've increased your credit limit...
10:58from £7,000 to £9,000.
11:01I mean, it was pretty mind-boggling really.
11:03Because I was trying to pay it down and do the sensible thing...
11:05and start to gradually repay the debt.
11:07And then the default...
11:08was, we're going to offer you more.
11:10You know, a year later I'm still in nearly £5,000 debt.
11:13Santander told us that when he signed up to his credit...
11:18card, Tom opted in to automatic credit limit increases.
11:23In a...
11:23statement, it said it monitors customer spending closely...
11:27against...
11:28transactions in order to spot any unusual and unaffordable behaviour.
11:33A recent survey suggests 4 in 10 credit card...
11:38shareholders were offered increased limits in the last year.
11:41And it made little difference...
11:43where the people were already in problem debt.
11:46They were offered increases...
11:48just the same.
11:49So, tip number two.
11:51It may not always be in your...
11:53best interests to take up that offer.
11:58I've come to the Millgate shopping centre in...
12:03with James Daly of Farrah Finance...
12:06and Ruby Fletcher from National...
12:08Debt Line.
12:09We're setting up a pop-up clinic...
12:11to offer advice on credit card use.
12:13What's the situation with your credit cards?
12:17So, I currently have two.
12:18The one I pay off monthly is only about £300...
12:20and the other one I make minimum repayments.
12:23I think stands at £2,000 now.
12:25The minimum payments...
12:26only sticking to that...
12:27it will...
12:28mean that you're really never getting out of debt.
12:30I would really encourage you to think about...
12:32chipping away at it more.
12:33Do you think you might be in a position...
12:34to pay off more on that card?
12:36Yeah, just not after Christmas.
12:39I've got a few.
12:40They're very well used at the moment...
12:42with the Christmas in it...
12:43and everything.
12:44It sounds to me like...
12:45using the credit cards...
12:46to kind of pay for living expenses.
12:48I think it'd be a really good idea...
12:49for you to sit down...
12:50do a budget.
12:51Actually, it might just be...
12:53a bit of tightening the belt in one area...
12:55to make it all balance out...
12:56and that'll be fine.
12:58Let's say you've got an average interest rate...
13:00of 25%.
13:01You've got £800 on your...
13:03of your card...
13:04and you're making...
13:05a minimum repayment...
13:06you know...
13:07that can still take you £70...
13:08for 22 years...
13:09to pay it off.
13:10And so by the time you've paid it all back...
13:12you know...
13:13you would have paid...
13:13many more times in interest...
13:15than you've...
13:16you know...
13:17ever borrowed.
13:18one of the most popular...
13:22one of the most popular...
13:23credit card offers...
13:24is the 0% balance transfer deal.
13:26It can buy you some...
13:28financial breathing space.
13:30For a small upfront fee...
13:32you try...
13:33to transfer...
13:34your balance...
13:35onto a new card.
13:36If you can pay it off...
13:37within a fixed period...
13:38you'll avoid paying...
13:39any interest.
13:40Do a balance transfer...
13:41Fluid gives you...
13:42no...
13:43five months to pay it off...
13:44interest-free.
13:45Attention-grabbing adverts...
13:46promising an easy way...
13:47to get on...
13:48top of credit card debt...
13:49try to persuade us...
13:50to swap cards.
13:530% cards...
13:55might seem like...
13:56loss leaders...
13:57but...
13:58what lenders know...
13:59and you probably don't...
14:00is that...
14:01only around...
14:02half of us...
14:03pay off the balance...
14:04before the end...
14:05of the interest-free period.
14:08the rest...
14:09end up paying interest...
14:10on the outstanding debt.
14:13as teacher Claire...
14:15discovered...
14:16I got a credit card...
14:17I got a credit card...
14:18and...
14:19before I knew it...
14:20I had maybe...
14:21two credit cards...
14:22and I treated myself...
14:23to some...
14:24designer things...
14:25that I actually...
14:26couldn't really afford...
14:27but...
14:28I felt like I could...
14:28because I had the...
14:29available balance...
14:30on the credit card...
14:31and it sort of...
14:32snowballed.
14:34Claire decided...
14:35to transfer the debt...
14:36on the two cards...
14:37onto one...
14:38zero percent card...
14:40I thought this was...
14:41a good way...
14:42to manage my finances...
14:43but...
14:43I didn't change...
14:44my spending habits...
14:45I still...
14:46was increasing...
14:47what I owed.
14:48because I was paying...
14:49the minimum payment...
14:50I couldn't clear the balance...
14:51by the end of the...
14:52agreement...
14:53so what I did...
14:54was I...
14:55combined...
14:56all those debts again...
14:57and...
14:58I got another...
14:59zero percent...
15:00and I did this...
15:01maybe...
15:02two or three more times...
15:03and by the end of it...
15:04I owed about...
15:05twelve thousand pounds...
15:06in credit cards.
15:09Eventually...
15:10Claire was unable...
15:11to find...
15:12another zero percent deal...
15:13that would cover...
15:14her debts.
15:15So at one point...
15:16the interest...
15:17erm...
15:18kicked in...
15:19so it wasn't...
15:20zero percent anymore...
15:21it was more like...
15:22twenty-four percent interest.
15:23I was spending...
15:24well over six hundred pounds...
15:25a month...
15:26towards my credit cards...
15:27but obviously...
15:28I had others...
15:28my living expenses...
15:29my car...
15:30my house...
15:31I just couldn't see a way...
15:32in how I could pay it off.
15:33it felt...
15:34completely impossible.
15:35I felt...
15:36like I'd failed...
15:37in this ass...
15:38respect to my life...
15:39because...
15:40I was in debt...
15:41and I couldn't tell anyone...
15:42about it...
15:43and it just felt...
15:43completely lonely.
15:46The problem is...
15:47once you move off...
15:48those promotional periods...
15:49and you're on...
15:50interest rates of...
15:51twenty-five...
15:52thirty...
15:53thirty-five...
15:53five percent...
15:54borrowing becomes...
15:55very expensive...
15:56very quickly.
15:58it's really easy...
15:59to go from...
16:00zero...
16:01to tens of...
16:02thousand pounds...
16:03of credit card debt...
16:03and lenders...
16:04facilitate that...
16:05way too easily.
16:06So...
16:07tip number three...
16:08as...
16:08zero percent...
16:09balance transfer...
16:10can help reduce the cost...
16:11of your borrowing...
16:12but to get the full benefit...
16:13you must keep on top...
16:14of your payments...
16:15and...
16:16make sure you pay it off...
16:17before the interest...
16:18free period ends.
16:23back at our...
16:24advice clinic...
16:25James finds someone...
16:26who could benefit...
16:27from a zero...
16:28five percent deal...
16:29but only...
16:30if he's...
16:31very careful...
16:32when I was in...
16:33full-time...
16:34I was able to...
16:35pay their whole...
16:36statement off...
16:37in full...
16:38at the moment...
16:39money's very tight...
16:40so you can...
16:41just about...
16:42pay off...
16:43minimum...
16:44at the moment...
16:43level of interest...
16:44that you're paying...
16:45compounding...
16:46month on month...
16:47you could find yourself...
16:48paying off that debt...
16:49for years...
16:50I mean...
16:51sometimes it can be...
16:52decades...
16:53you might be able to...
16:54transfer whatever...
16:55you've got left...
16:56on your credit card...
16:57now...
16:58to a zero percent...
16:59balance...
16:58transfer card...
16:59and then...
17:00you won't be...
17:01building up interest...
17:02for a period of...
17:03time...
17:04but...
17:05always...
17:06have a...
17:07have a plan...
17:08to pay the balance off...
17:09by the end...
17:10of the zero percent...
17:11period...
17:12of the zero percent...
17:13your debt...
17:14starts to increase...
17:15really rapidly...
17:16Credit card...
17:17companies use...
17:18something called...
17:19a credit score...
17:20to help decide...
17:21if...
17:22and how much...
17:23to lend...
17:22the score...
17:24is based on...
17:25things like...
17:26your debt levels...
17:27number...
17:27of credit applications...
17:28and whether...
17:29you pay your bills...
17:30on time...
17:31a higher credit score...
17:32means...
17:33you're likely...
17:34to be offered...
17:35the most competitive...
17:36interest rates...
17:37and you may find...
17:37easier to borrow...
17:38we are going to be...
17:39talking about...
17:40your experience...
17:41credit score...
17:42Experian...
17:43is the UK's...
17:44biggest...
17:45credit score...
17:46provider...
17:47its adverts...
17:48so checking...
17:49your credit score...
17:50is an easy way...
17:51to unlock...
17:52better borrowing...
17:53opportunities...
17:54and take control...
17:55of your financial health...
17:57if your credit score...
17:58is low...
17:59there are two things...
18:00you can do about it...
18:02pay off some debt...
18:03or open up...
18:04new lines of credit...
18:05but the cheapest...
18:07cards...
18:08probably won't be...
18:09on offer...
18:10so you're...
18:11more likely...
18:12to be pushed...
18:12towards something...
18:13called...
18:14a credit builder card...
18:15like smart moves...
18:16for better credit...
18:17that's the game plan...
18:18with aqua...
18:19the adverts...
18:20make it sound...
18:21so straightforward...
18:22but...
18:23there are risks...
18:24if you don't pay off...
18:26your balance...
18:27each month...
18:28the cards...
18:29can quickly...
18:30drive you further...
18:31into debt...
18:32sometimes...
18:33these products...
18:34are marketed...
18:35as being helpful...
18:36as being...
18:37helping you...
18:38to build your credit...
18:37score...
18:38and in some...
18:39circumstances...
18:40they can be...
18:41but they have...
18:42much higher...
18:43interest rates...
18:42and the risk...
18:43there...
18:44is that...
18:45if you're...
18:46only making...
18:47minimum repayment...
18:48it's going to...
18:49take a long time...
18:47to pay off...
18:48that debt...
18:51Vanessa Clark...
18:52says...
18:53she owed...
18:54£11,000...
18:55when she opened...
18:56a new credit...
18:57builder card...
18:57from company...
18:58Newday...
19:01New...
19:02uses...
19:03slick advertising...
19:04targeting...
19:05video...
19:06and social media...
19:07platforms...
19:07to promote...
19:08its credit card...
19:09brands...
19:10including...
19:11Fluid...
19:12Marbles...
19:13Aqua...
19:12and BIP...
19:15APR rates...
19:16are advertised...
19:17at 34.9%...
19:19but...
19:20if you have...
19:21a poor credit history...
19:22you may...
19:23have to pay...
19:24even more...
19:25When I initially...
19:26took out...
19:27the credit card...
19:27I already had...
19:28other debts...
19:29other credit cards...
19:30and I think...
19:31it was about...
19:32maybe £12,000...
19:32the debt...
19:33before that...
19:34three or four loans...
19:35and then...
19:36two or three...
19:37credit cards...
19:37Vanessa says...
19:38her debts...
19:39grew further...
19:40and that...
19:41a year later...
19:42she owed...
19:43more than £30...
19:42£13,000...
19:43New Day's response...
19:45to increase the limit...
19:46on her...
19:47card...
19:48from £300...
19:49to £1,050...
19:52you're already...
19:53at the point...
19:54where you've got no money...
19:55you just use it instantly...
19:56like...
19:57you've got no other choice...
19:58because you need to pay...
19:59your bills...
20:00you're paying...
20:01other credit cards with it...
20:02just...
20:02general...
20:03surviving...
20:04Far from building...
20:05her credit score...
20:06as in...
20:07intended...
20:08more spending...
20:09on her new card...
20:10plus...
20:11the mounting interest...
20:12was...
20:12pushing Vanessa...
20:13further...
20:14into debt...
20:15you're running out...
20:16constantly...
20:17and then the payments...
20:17going up...
20:18and it's just like...
20:19a never-ending cycle...
20:20of...
20:21I'm never gonna get out of this...
20:22you know...
20:22some of these lenders...
20:25are very aware...
20:26they've got people using...
20:27these cars...
20:28in ways that...
20:29they weren't intended...
20:30um...
20:31but they're very happy about...
20:32that...
20:33because they're paying...
20:34enormous amounts...
20:35of interest to them...
20:36in 2023...
20:37Vanessa...
20:38complained...
20:39to the financial...
20:40Ombudsman service...
20:41New Day...
20:42had conceded...
20:43it shouldn't have...
20:44given Vanessa...
20:45the card...
20:46or...
20:47increased her limit...
20:47and agreed to pay back...
20:48all the interest charged...
20:50more than £300...
20:52last year...
20:54New Day...
20:55wrote off fees...
20:56or interest...
20:57for more than...
20:58three and a half...
20:59thousand customers...
21:00after they...
21:01complained...
21:02about...
21:02unaffordable lending...
21:03the centre...
21:06for...
21:07responsible credit...
21:08a research...
21:09policy...
21:10and campaigning charity...
21:11has studied...
21:12complaints...
21:13about...
21:14unaffordable...
21:15lending...
21:16the lender...
21:17in this case...
21:18New Day...
21:19is expected...
21:20to reassess...
21:21whether somebody...
21:22can afford...
21:23to repay...
21:24that amount...
21:25of credit...
21:26and it's clear...
21:27that New Day...
21:27just failing...
21:28to do that...
21:29Should the regulator...
21:30be doing more?
21:31Yes...
21:32absolutely...
21:33more definitely...
21:34needs to be done...
21:35and for the FCA...
21:36to...
21:37take action...
21:38where it sees...
21:39clear evidence...
21:40of comprehensive...
21:41failings...
21:42financial conduct...
21:43authority...
21:44says the reforms...
21:45on persistent debt...
21:46and affordability...
21:47it introduced...
21:48in 2018...
21:49now save...
21:50borrowers...
21:511.3 billion...
21:52a year...
21:53it also says...
21:54lenders...
21:55should only...
21:56provide credit...
21:57to people...
21:57who can afford...
21:58to repay...
21:59it says...
22:00it is currently...
22:01reviewing the rules...
22:02and if it identifies...
22:03issues...
22:04it will not hesitate...
22:05to act...
22:07in a statement...
22:09New Day...
22:10told us...
22:11New Day...
22:12products...
22:12are fully...
22:13regulated...
22:14with robust...
22:15affordability...
22:16checks...
22:1725...
22:18just...
22:190.09%...
22:20of customers...
22:21had a successful...
22:22affordability...
22:23complaint...
22:24the vast majority...
22:25of customers...
22:26have a positive...
22:27experience...
22:32but is there...
22:33something else...
22:34going on...
22:35with credit score...
22:36providers?
22:37Mum of 5...
22:38Amanda...
22:39has asked...
22:40that we don't...
22:41show her face...
22:42she's on universal...
22:43credit...
22:44and 10 years ago...
22:45went to a debt...
22:46charity...
22:47after her...
22:47borrowing...
22:48on credit cards...
22:49hit £10,000...
22:50it took years...
22:52but Amanda says...
22:53she got on top...
22:54of her debt...
22:57how were you feeling...
22:58at that time?
22:59relieved...
23:00that it was all over...
23:01erm...
23:02like I had...
23:02a fresh start...
23:03had then...
23:04extra money...
23:05back in...
23:06my pocket...
23:07in my household...
23:10Amanda had signed up...
23:11with credit score...
23:12provider...
23:13Experian...
23:14and...
23:15like many people...
23:16thought checking...
23:17her credit score...
23:17was a responsible...
23:18thing to do...
23:19It was really useful...
23:21like I'd get the...
23:22monthly alert...
23:23of...
23:24the status of...
23:25my financial affairs...
23:26but...
23:27as she came closer...
23:28to paying off her debt...
23:29the emails...
23:30changed...
23:32I wasn't just getting...
23:33the monthly...
23:34credit report...
23:35updates...
23:36it would...
23:37be...
23:38offers...
23:39in the lines of...
23:40your credit card...
23:41approval...
23:42rate...
23:43has increased...
23:44inviting you...
23:45to look at...
23:46lenders...
23:48She says...
23:49Experian...
23:50bombarded her...
23:51with offers...
23:52of high...
23:52interest...
23:53credit builder...
23:54cards...
23:55And how frequently...
23:56were these coming through?
23:57too frequently...
23:59too frequently...
24:00erm...
24:01it's...
24:02just...
24:03constant...
24:06and...
24:07you're getting...
24:08these emails now...
24:09even though you're...
24:10trying to pay off...
24:11existing debts?
24:12Yeah...
24:12wow...
24:13that's really...
24:14that's a lot...
24:17many of the...
24:21authors...
24:22promise...
24:22best...
24:23to improve her...
24:24credit score...
24:25if she took out...
24:26a new card...
24:27or loan...
24:27and...
24:29what was your reaction...
24:30to getting those offers?
24:31my...
24:32I'll just...
24:33just have the one...
24:34keep it as an emergency...
24:35erm...
24:36but then...
24:37yeah...
24:37the minute you take out one...
24:39you get more emails...
24:40again...
24:42to apply for another one...
24:43and another one...
24:44and another one...
24:47Experian...
24:48says the recent emails...
24:49sent to Amanda...
24:50highlighted...
24:51options...
24:52that could have allowed her...
24:53to consolidate her debt...
24:55and pay it off sooner...
24:56or for less...
24:57like many people...
25:00Amanda trusted...
25:01that subscribing...
25:02to a credit score...
25:03provider...
25:04could help her...
25:05overcome her debt problems...
25:06what she did...
25:07didn't know...
25:08is that companies...
25:09like Experian...
25:10are also...
25:11paid commission...
25:12by credit card lenders...
25:13to promote their products...
25:17well...
25:18it's not fair...
25:19people are ending up...
25:20with worse outcomes...
25:21because they're being encouraged...
25:22to borrow more...
25:23than they can afford...
25:24to pay back...
25:25and that has...
25:26obviously...
25:27consequences...
25:28for them...
25:27further down the line...
25:29And Amanda...
25:30is far from alone...
25:32a survey...
25:33of low...
25:34and medium...
25:35income adults...
25:36by the Centre...
25:37for Responsible Credit...
25:37suggests...
25:38that marketing...
25:39from their credit score...
25:40provider...
25:41led many...
25:42to feel pressured...
25:42into taking on...
25:43more debt...
25:44than they could afford...
25:45over half...
25:46said they had...
25:47received offers...
25:48on credit products...
25:49from their score...
25:50provider...
25:52the real...
25:53upshots...
25:54of that...
25:55are that many...
25:56do take up...
25:57those suggested...
25:57offers...
25:58and subsequently...
25:59within six months...
26:00according to our research...
26:01faced some...
26:02very...
26:03very...
26:04problematic...
26:05outcomes...
26:06Experian says...
26:07has been developing...
26:08a process...
26:09to identify...
26:10potentially vulnerable...
26:11customers...
26:12and...
26:12stop...
26:13sending them...
26:14marketing emails...
26:15it also says...
26:16it gives its customers...
26:17as much information...
26:18as possible...
26:19to help them...
26:20access credit...
26:21they can afford...
26:22and that it helps...
26:24people understand...
26:25their options...
26:26for switching...
26:27existing...
26:27debt...
26:28to lower...
26:29or 0%...
26:30interest options...
26:31helping people...
26:32repay sooner...
26:32and...
26:33for less...
26:34it also says...
26:35it works closely...
26:36with debt...
26:37priorities...
26:42of course...
26:43we all need...
26:44to take responsibility...
26:45for any debt...
26:46we take on...
26:47the government says...
26:49it wants more...
26:50financial education...
26:51better...
26:52access...
26:52to responsible credit...
26:53and...
26:54more support...
26:55for those...
26:56in problem debt...
26:57UK finance...
26:59UK finance...
27:01UK finance...
27:02which represents...
27:03lenders...
27:04says that...
27:05credit card providers...
27:06are committed...
27:07to lending...
27:07responsibly...
27:08and comply...
27:09with strict...
27:10regulatory rules...
27:11to assess...
27:12affordability...
27:12when agreeing...
27:13borrowing limits...
27:14it also says...
27:15support is provided...
27:16by lenders...
27:17to those...
27:18at risk of...
27:19or...
27:20in financial difficulty...
27:22by...
27:23understand...
27:24vague...
27:25also...
27:26we'll be very active...
27:27before...
27:29you...
27:31it's also powerful...
27:33merely a promotion....
27:34that means no...
27:43to mess...
27:45to your trust...
27:46by the
27:50of living crisis still biting and with access to easy credit, the youth
27:55UK's credit card bill looks set to rise even higher.
Comments