Only borrow what can be repaid, expert warns

Tuesday, June 22nd 2010

People are dealing with their credit card debts positively and more efficiently than many experts had previously predicted, according to one expert.

Bill Hardekopf, writing for the Forbes blog, says the recent financial situation has resulted in a number of citizens paying off both personal loan balances and mortgage repayments at a healthy rate.

However, he warns there is still an air of concern in the industry, as this is not yet the norm and some people persist with a risky approach.

For example, the number of cases of borrowers reneging on credit card deals and defaulting on their mortgage arguably remains too high.

Perhaps the only solution to credit confusion is to only borrow what a household can afford to repay, as Mr Hardekopf points out allowing others to pick up the bill when things go wrong is not the way to operate a sustainable economy.

The Credit Action report for June shows the average household debt in the UK is now more than £57,000.