April 20, 2006

By Peter Kenny

Over the last few months I have been warning people to control their credit card spending, be aware of exactly how much they owe at any time and been demanding that Banks and credit card companies take more steps to control the rise of unmanageable debt.

I have even sent out a press release asking credit card companies to increase minimum payments to 5%

Yesterday I looked in my wallet and found 5. I don’t carry a balance on any of them as I work my on rotation depending when a balance due date arrives, trying to maximise my interest free period. I practise what I preach! When I added sum total of all the credit limits on the cards, I was staggered to find that at any time and without consultation or permission I could go out and spend over £40,000.

I know there many people out there who can spend more, however, these asked for no proof of income, there were no questions asked as to how I could repay and debts I ran up.

Next I calculated how much the minimum payments would be every month if I reached the credit limit for each credit card, and was astonished to find my monthly minimum payments would amount to more than £1200!

Now the average monthly salary for the United Kingdom is under £1700. This would leave just £500 each month to pay for a mortgage or rent, household groceries, utilities like electricity and gas and finally any extras like travel expenses. These figures do not even include non-essential items.

I would urge anyone who is losing control of their spending to stop and take a step back. Calculate how much a new plasma television will cost in the long run if you cannot clear the balance or do you really need those shoes you seen in the High Street.

Please be sensible with your finances and this also applies to banks and credit card companies who have an obligation to control the amount of credit offered to consumers.