macq
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Post by macq on Dec 31, 2018 12:08:15 GMT
You are probably right about the levels of debt and would agree about people maxing out credit cards but its not much different to many in them days borrowing on the never-never.My understanding of talking to family is that it was still week to week in the 50's with things on "tick" taking the place of the c/card the only difference perhaps being the goods required being more essential in them days.But either way its certainly going to come home to roost one day
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angrysaveruk
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Post by angrysaveruk on Dec 31, 2018 12:42:33 GMT
You are probably right about the levels of debt and would agree about people maxing out credit cards but its not much different to many in them days borrowing on the never-never.My understanding of talking to family is that it was still week to week in the 50's with things on "tick" taking the place of the c/card the only difference perhaps being the goods required being more essential in them days.But either way its certainly going to come home to roost one day It would be interesting to know how much of this debt comes from what I would call frivolous spending such as people going on holiday on credit cards or buying consumer items they dont need. I think social media making people think they are celebrities in their own little world has put a lot of pressure on people to live beyond their means. Thankfully I have never really given a  about what other people think.
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macq
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Post by macq on Dec 31, 2018 16:37:17 GMT
You are probably right about the levels of debt and would agree about people maxing out credit cards but its not much different to many in them days borrowing on the never-never.My understanding of talking to family is that it was still week to week in the 50's with things on "tick" taking the place of the c/card the only difference perhaps being the goods required being more essential in them days.But either way its certainly going to come home to roost one day It would be interesting to know how much of this debt comes from what I would call frivolous spending such as people going on holiday on credit cards or buying consumer items they dont need. I think social media making people think they are celebrities in their own little world has put a lot of pressure on people to live beyond their means. Thankfully I have never really given a about what other people think. Hence the user name & avatar? 
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Post by lotus_eater on Jan 5, 2019 17:07:35 GMT
The estimated return at Zopa for loans up to 5 years is far too low compared with the risk. Instant access at 4.1% with Assetz looks better value. 2% is available in FSCS protected 12 month accounts, yields of 5 to 6% are available in stock market funds. With UK stocks at a two year low I expect a re-rating once Brexit settles down. Ratesetter are no longer growing, and are struggling to become profitable, certain other high risk lenders have already failed or are about to fail. My P2P will continue to run down in favour of safer options. 100% agree. I just bailed out of Zopa and moved capital to other lenders. The Risk/Reward is just not worth it anymore IMHO.
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copacetic
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Post by copacetic on Jan 8, 2019 14:44:04 GMT
Note that debt in itself may not be bad. If large corporates were going into debt to fund R&D, capital expediture etc this could be considered worthwhile. Similarly, the government borrowing (via say 50-year Gilts at 1.70%), when inflation runs at 2-3% is fine; you are being paid to borrow in real terms and have locked this in for 50 years. Using that money for infrastructure investment could also be considered good. The issue here is that it's households who are now running a deficit, that this is very unusual, and it's now been going on for 8 quarters. We don't know how this reduction in net savings is being distributed but there is little evidence to suggest it is the wealthy cohorts selling assets; it's poorer cohorts taking on debt. Moreover, they are not paying 1.7% for 50 years fixed!
True, personally I borrow at 0% fixed for 2 or more years currently!
I kind of wonder why banks do this because it's bound to be costing them a couple of % interest at least plus the effects of inflation on the capital repayment. I guess they're expecting people to mess up so they can charge some penalties which is kind of hard to do if you set up a DD for the minimum repayment and put a date in your calander for the end of the interest free period. It also makes the statistic that 11% of people in the UK with maxed out credit cards angrysaver points out less scary ... assuming most of us are just doing it to screw over the banks!
The adage "the worst loans are written in the best times" makes me think we might be at the top of the credit cycle since writting loans that guarantee a loss seems to be about as bad as it gets.
With Zopa's historically low expected returns I wouldn't hold out much hope for a positive return if another recession is round the corner.
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aju
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Post by aju on Jan 8, 2019 17:06:11 GMT
Note that debt in itself may not be bad. If large corporates were going into debt to fund R&D, capital expediture etc this could be considered worthwhile. Similarly, the government borrowing (via say 50-year Gilts at 1.70%), when inflation runs at 2-3% is fine; you are being paid to borrow in real terms and have locked this in for 50 years. Using that money for infrastructure investment could also be considered good. The issue here is that it's households who are now running a deficit, that this is very unusual, and it's now been going on for 8 quarters. We don't know how this reduction in net savings is being distributed but there is little evidence to suggest it is the wealthy cohorts selling assets; it's poorer cohorts taking on debt. Moreover, they are not paying 1.7% for 50 years fixed!
True, personally I borrow at 0% fixed for 2 or more years currently!
I kind of wonder why banks do this because it's bound to be costing them a couple of % interest at least plus the effects of inflation on the capital repayment. I guess they're expecting people to mess up so they can charge some penalties which is kind of hard to do if you set up a DD for the minimum repayment and put a date in your calander for the end of the interest free period. It also makes the statistic that 11% of people in the UK with maxed out credit cards angrysaver points out less scary ... assuming most of us are just doing it to screw over the banks!
The adage "the worst loans are written in the best times" makes me think we might be at the top of the credit cycle since writting loans that guarantee a loss seems to be about as bad as it gets.
With Zopa's historically low expected returns I wouldn't hold out much hope for a positive return if another recession is round the corner.
Be very careful with what you do with the money you borrow from cards. I've mentioned it before but back in the dark days of 2007, just before that crash we all suffered in one way or another, I decided to try my hand at a thing called stoozing - I was bored with not having anymore funds to make money on and one of our empty credit cards was offering to balance transfer money to another bank at a front end rate of 3% I think it was. So I looked around at the current savings rates and found a nice Icelandic bank offering 7%+ so I thought ok lets stooze it for a year and make some extra dosh. All went well for a couple of months until suddenly there was a bit of an issue in this place called the world and in particular this Icelandic Bank suddenly collapsed with my £7000+interest and all. Well, Mrs Aju was not amused after I plucked courage to let her know OUR predicament and then when she heard that we stood to gain out of this debacle after tax etc was only £140 suffice to say she was not a happy bunny indeed for quite some time in fact. After a couple of months of sweating it out eventually the Uk govt took on the debt - I think they were considering charging the bank in question but not sure the final outcome of that - fortunately for us we actually did make £140 after tax in the end. So I guess with current climates threatening to repeat themselves - project fear and then some - I don't think I will be borrowing money ever again. In fact I only ever use cards now to get fringe benefits and always pay them off religiously. I'm not saying what you are doing is wrong, who am I to judge anyway, and I get my fair share of defaults in Zopa but since that salutary tale in my life I've vowed to endeavour to be more sensible for want of a better word.
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pom
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Post by pom on Jan 9, 2019 8:41:41 GMT
Be very careful with what you do with the money you borrow from cards. I'd also add it might pay to be careful of the effect on your credit score. I had some very large purchases a few months ago that I put on CCs rather than debit cards because with the end of fees why not get the miniscule cashback/points/etc? Maxed one out and, nearly a second. My credit score dropped by nearly 50 points (I'd only recently signed up to noddle so it was "fun" to watch), tho as I pay off in full each month it soon recovered, and mine is good enough anyway that it wouldn't really matter. Whether the fact it was temporary/unusual had more/less effect I don't know. Course I'd hope everyone here has good enough scores anyway..
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aju
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Post by aju on Jan 9, 2019 9:01:45 GMT
Be very careful with what you do with the money you borrow from cards. I'd also add it might pay to be careful of the effect on your credit score. I had some very large purchases a few months ago that I put on CCs rather than debit cards because with the end of fees why not get the miniscule cashback/points/etc? Maxed one out and, nearly a second. My credit score dropped by nearly 50 points (I'd only recently signed up to noddle so it was "fun" to watch), tho as I pay off in full each month it soon recovered, and mine is good enough anyway that it wouldn't really matter. Whether the fact it was temporary/unusual had more/less effect I don't know. Course I'd hope everyone here has good enough scores anyway.. Good point pom, another one is closing accounts too, recently myself and Mrs Aju closed some bank current accounts that we had run down in our realignment of investments and banking and it had a slight hit of around 20-30 pints on my score too.
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benaj
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Post by benaj on Jan 9, 2019 10:37:02 GMT
I'd also add it might pay to be careful of the effect on your credit score. I had some very large purchases a few months ago that I put on CCs rather than debit cards because with the end of fees why not get the miniscule cashback/points/etc? Maxed one out and, nearly a second. My credit score dropped by nearly 50 points (I'd only recently signed up to noddle so it was "fun" to watch), tho as I pay off in full each month it soon recovered, and mine is good enough anyway that it wouldn't really matter. Whether the fact it was temporary/unusual had more/less effect I don't know. Course I'd hope everyone here has good enough scores anyway.. I monitor my personal data from three credit reference agencies every month. I am more interested to those credit reports rather than fixated to a score since different agencies have have different details, scores and calculations. These reports are useful to spot identity theft and other financial connection activities. To be honest, I have no idea how banks / lenders / service providers make decisions based on credit scores, because the scores do not provide meaningful data for affordability. One can easily have a 999 score with Experian while having a good score on Callcredit. In theory, someone could have a perfect credit score even if they can't even afford to repay the loan back.
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aju
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Post by aju on Jan 9, 2019 11:06:30 GMT
I'd also add it might pay to be careful of the effect on your credit score. I had some very large purchases a few months ago that I put on CCs rather than debit cards because with the end of fees why not get the miniscule cashback/points/etc? Maxed one out and, nearly a second. My credit score dropped by nearly 50 points (I'd only recently signed up to noddle so it was "fun" to watch), tho as I pay off in full each month it soon recovered, and mine is good enough anyway that it wouldn't really matter. Whether the fact it was temporary/unusual had more/less effect I don't know. Course I'd hope everyone here has good enough scores anyway.. I monitor my personal data from three credit reference agencies every month. I am more interested to those credit reports rather than fixated to a score since different agencies have have different details, scores and calculations. These reports are useful to spot identity theft and other financial connection activities. To be honest, I have no idea how banks / lenders / service providers make decisions based on credit scores, because the scores do not provide meaningful data for affordability. One can easily have a 999 score with Experian while having a good score on Callcredit. In theory, someone could have a perfect credit score even if they can't even afford to repay the loan back. Yeah, I had to go out as I wrote my comments and was about to add the note that I was just surprised by the change but that it was not a really relevant item for me as you say its better to just check these - I use pdf check tools to let me see the changes quickly in these reports rather than follow what they say. I usually do this every 3 months or so depending on how busy I am. The cynic in me thinks some of the agencies tools are more interested in selling me cards and things than my report but it is useful to find changes one wasn't expecting. I think that the CRA'a have no idea how the banks and other organisations use their data as none of them will reveal this so the only thing the CRA's values are for is for them to make another sale as some of them charge for this info, well they used to but I've not checked recently. My needs for credit these days have long gone although I must look into getting Mrs Aju's ability to get this access for cards that can be useful as long as she pays them off, just in case something were to happen to me!.
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pom
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Post by pom on Jan 9, 2019 11:39:24 GMT
although I must look into getting Mrs Aju's ability to get this access for cards that can be useful as long as she pays them off, just in case something were to happen to me!. Well quite....particularly as something will eventually happen to you, you just don't know if it'll be before or after something happens to Mrs Aju ! Ah sorry for that cheerful thought.... !
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aju
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Post by aju on Jan 9, 2019 14:05:12 GMT
although I must look into getting Mrs Aju's ability to get this access for cards that can be useful as long as she pays them off, just in case something were to happen to me!. Well quite....particularly as something will eventually happen to you, you just don't know if it'll be before or after something happens to Mrs Aju ! Ah sorry for that cheerful thought.... ! , thanks for that cheerful thought as you called it! I'm sure though you also think of Mr pom in these situations too, assuming he's not already well covered that is ... PS. I'm damn certain I will be first but one never knows.
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about what other people think.
