Credit Awareness Week - 16th May, 2007

Sian James MP has signed EDM 1440 in the House of Commons regarding Credit Awareness Week

Sian James MP said:-

"Credit Awareness Week runs from 14th – 20th May and aims to help the British public gain better control of their financial affairs. Credit Awareness Week reveals that increased awareness about the dangers of poor financial control and mounting fears over debt levels are having little effect on the average persons finances.

"I have therefore signed the EDM on this matter, which states:- That this House welcomes the first Credit Awareness Week, taking place between 14-20 May; fully supports the objectives of the campaign to provide a focal point for the discussion of credit issues and help UK citizens better understand credit and debt; furthermore, notes that while some progress has been made towards creating greater awareness and understanding, more can be done to promote financial literacy across UK society."

More Information:-

More than eighty per cent of Britons admit to regularly overspending and millions are driven to consider last resort measures such as bankruptcy, according to new research published today by CreditExpert.co.uk, the online credit report monitoring service from Experian® and sponsor of Credit Awareness Week.

Financial mistakes, like taking out expensive consolidation loans with long payback periods and irrational ‘therapy spending’ caused by stress, arguments with partners or simply feeling low are some of the main contributors to a large number of Britons regularly overspending. This again highlights the need for practical education and advice. The research also reveals:

• One in 20 (five per cent) have considered or taken out an IVA or declared themselves bankrupt
• Almost one in 10 (nine per cent) have taken out a credit card to pay off debt on another credit card
• One in 10 (10 per cent) have missed payments on credit cards, store cards, loan or mortgage repayments

Confusion and lack of accountability lead to financial ‘moments of madness’

Almost a quarter (24 per cent) of Brits admit to finding it hard to control their spending and claim financial matters are hard to understand, suggesting that the consequences of ‘moments of financial madness’ are not hitting home. With the CreditExpert research revealing that Britons continue to commit financial mistakes in huge numbers, from using one credit card to pay off another to taking out high interest consolidation loans, it seems consumers are getting more involved in credit with little understanding of how credit agreements work or the potential risks they are taking.

Mistakes such as missed payments on credit agreements can lead to unexpected charges and poor credit ratings, while ‘quick fix’ solutions like taking out an IVA will affect your credit report for at least six years.

Therapy Spending

Lack of understanding of the implications of overspending and financial mistakes is not the only reason for Britons’ lack of financial control. Emotional triggers and modern lifestyle pressures seem to be leading people to overspend and make rash financial judgements despite more than four in 10 (43 per cent) of the population feeling that one should have control of all aspects of your finances, whether they be large or small:
• Over a quarter (26 per cent) of the population overspend to cheer themselves up when they are feeling low
• Almost one in six (14 per cent) overspend by treating themselves after a stressful day at work
• One in 20 (5 per cent) overspend after an argument with their partner
• A quarter (25 per cent) overspend by indulging in a passion or hobby