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and credit cards. We now owe £1.004 trillion or £1,004,290,000,000. This could never happen if it wasn't for computers, money is moving so fast that the only way of controlling it is with computers. I was in a well known department store not that long ago and there was a young couple trying to buy a settee. Now they had the money on the hip but the sales assistant wanted them to open an account and buy other things they obviously didn't want. His sales pitch. I will just have to "look you up" on the computer and we are in business.
Have computers speeded up debt? Yeah, they must have done. You can ring up a loan and now be told you have just been Lent £10.000 in five minutes, the computer will have run checks and scans and whatever on you in seconds. Regarding the 10 grand, theres a big glossy advert on the back of a TV guide here in front of me. It says...
£10.000 FOR ONLY £85 A MONTH.
Seems a hell of a good deal until you realise that you are paying back £87.49 (not 85 like the add says) for 300 months, thats a repayment of £26247!
Computers fault? No obviously not but the advancement and speed and storage and the details they have on us must have taken a major role in the fact that we now owe a Tillion pounds.
computers should make it easier to control debt - all the credit card companies could have a combined database to check how much debt an individual has got already before issuing another plastic card!
I use credit cards, but pay them off each month, I was brought up to save up for anything you wanted and then buy it - old fashioned I know but that's how I like it.
Mind you, I would not like to be a youngter trying to buy a flat or a house.
I remember once getting a sales call from my bank. "will you require a personal loan in the next 12 to 24 months?" they asked. No I replied. The guy seemed astounded, he said "but how will you manage to go on holiday or buy a new car?" Simple I said, save up first and pay when I buy it. He could not understand this principle.
Most of the trillion pound debt is probably tied up in mortgages for property.
I agree with your sentiment, Georgemac, but if you saved up for a house before purchase, you'd still be homeless and saving when it was time to depart this world.
Of getting into the system, to clear my debts,
we had hire purchase. Some people over-committed, and failed to make payments. The evil people who peddled hire purchase schemes were blamed.
Now we have computers, and as long as they've been around it's been convenient to blame them - "I'm sorry that you got charged three times, it's our computer you know, it does that sometimes".
Both hire purchase and computers were conceived and developed by human beings. Other human beings made use of them, and some human beings weren't able to stop themselves taking advantage of the opportunities offered. "Have that three-piece suite now and pay off over two years" used to be the cry. Now it's "Have that new car and that holiday in Thailand and pay much later".
Now, as then, human nature is the enemy, not computers.
Well said FE. We are all too ready to blame anything or anyone but ourselves.
However, sales promotions and inducements to buy are far more aggressive these days and it is understandable that many people go for it. Live now, pay later is today's motto.
I agree about house purchase, only the very few ultra rich will ever be able to buy a property without a mortgage.
When I built our home back in 1985, the mortgage rate was almost 14%, and I thought I was taking on a debt I would never clear. However high inflation probably means the debt is not nearly as bad now as it could have been. My endowment is unlikely to cover the full mortgage (I was young and naive and just signed everything I was told to!) but the amount is peanuts when compared to todays figures.
I worry for our children when they come to have to buy a home.
The FE is again correct, human nature is the enemy, but a lot of irresponsible business practice is also going on, with almost no limit on the amount of credit available to people on numerous store and credit cards.
If we seriously want to tackle this, there should be some sort of combined database and a limit compared to earnings/assets of how much credit can be issued to an individual.
I recall the sequence of events when I purchased my first house.
I was on a building site ( on Business ) and saw just the house and site I wanted. On the spur of the moment I put a £50 deposit down at the sales office. I drove to my Building Society and immediately saw the manager who then and there agreed the mortgage. He then phoned a Solicitor and 5 minutes later I was in his office and the deed was done.
Total time from site to formal proceedings one hour. I had committed myself and now had an horrendus debt of £2000.
A few weeks later I was in my bank making arrangements for the then eqivalent of direct debit to pay the mortgage when the manager asked to see me and explained that I would find that setting up the house would cost more than I thought so he arranged an overdraft facility in case I needed it.
Golly life was easy then.
I've had exactly the same approach as georgemac. They seem totally perplexed when you don't want to borrow money. Obviously not been briefed for that eventuality. Actually I don't have a credit card, and don't want one. I don't buy anything I can't pay for. (except a house of course)
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