According to research, `the bank of Mum and Dad` is now calling in its debts – as parents ask for larger amounts of money back from their children, The Telegraph reports.
The findings revealed that one in 10 grown-up children either gave or lent, on average, 8,250 to their parents last year. This figure is 1,750 higher than it was in 2008.
More than one third of parents admitted to using the money they received from their children to repay their own debts, while a similar amount used the money to cover their everyday expenses.
A spokesperson for Debt Advisers Direct commented: “We would advise anyone struggling to afford their day-to-day living costs and/or their debt repayments after the recession to seek professional debt advice.
“Borrowing money from family members may provide a temporary solution to the problem, but it is unlikely to solve it unless they start managing their finances more effectively.”
Debt settlement is like any type of debt management, there are pros and cons. A lot of consumers find that the pros far outweigh the cons and proceed with debt settlement. While debt settlement is not for everyone, it does work quite well for those that proceed. Despite its many successes, you should be aware of the pros and the cons before you decide that debt settlement is the right option for you.
The Pros of Debt Settlement
1. Debt settlement often allows for debt to be repaid within three years. 2. You’ll be able to build your credit back up in less time than you might have thought. 3. Your accounts may be brought to current status to instantly raise your credit score. 4. You can include most unsecured debts in your debt settlement. 5. Settlement will stop any more black marks from appearing on your credit so it will be easier to recoup your buying power once the debt is paid off.
The Cons of Debt Settlement
1. There is usually a monthly fee associated with debt settlement agencies 2. It is often difficult to achieve debt settlements on your own 3. D
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This week’s news brings interesting implications for consumer finances. First we learned that existing home prices have slumped to record lows, which has the media buzzing about the “new role” of owning a home. The new role is that our homes no longer function as limitless ATM machines. No more buying electronics, recreational vehicles, jewelry, and designer wardrobes with home equity loans and lines of credit. Under these circumstances, it appears that consumers would again turn to credit cards for the instant gratification of discretionary purchases. No way. Americans may finally be getting the message about the high cost and consequences of carrying high credit card debt.
Federal Reserve: Credit card debt decreases for 21st consecutive month
The Federal Reserve reports that credit card debt levels are continuing to fall, and that average credit card debt for individuals has fallen to $4951 as of June 30. This is the first time since 2002 that average consumer credit card debt has fallen below $5000. This is a trend worth continuing. Altho
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The coalition government’s first budget will hit the poor the hardest, according to a report by the Institute for Fiscal Studies (IFS).
The IFS claimed that proposed benefit cuts, such as cuts in tax credits, housing benefits and disability allowance, will hit those on lower incomes the hardest, taking a greater proportion of their total income, with the analysis suggesting that the poorest families will be hit to the tune of £422 between the Budget and April 2014.
This means that only the richest 10% of households lost more in cash terms from the Budget, than those in the bottom 60%.
The report also questioned the government’s decision to use the Consumer Prices Index (CPI) instead of the Retail Prices Index (RPI) when calculating certain benefits, given that CPI does not take into account increases in housing costs.
The report said: “Low-income households of working age lose the most as a proportion of income from the tax and benefit reforms announced in the emergency Budget.
“Those who lose the least are households of working age without children in the upper half of the income distribution.
“They do not lose out from cuts in welfare spending, and they are the biggest beneficiaries from the increase in the income tax personal allowance.”
The Treasury said it did not accept the “selective” findings of the IFS.
Consumers took on 2bn more mortgage debt than they repaid in July, according to the latest figures from the British Bankers` Association (BBA).
This represented a 4.1% annual increase in net mortgage lending by banks, the report adds.
Gross mortgage lending came to 8.4bn in July, but this was down on the 8.6bn seen both a month earlier and on average over the six months before that.
Mortgage lending for house purchase came to 5bn, while remortgages came to 3bn and `equity withdrawal and other purposes` accounted for 0.5bn.
Meanwhile, the BBA`s figures also showed a slight increase in net consumer credit lending in July. Net credit card lending increased slightly, but net overdraft lending fell.
Although credit-challenged consumers typically have problems qualifying for a general purpose credit card, using store brand (also called private label) credit cards can help rebuild credit. There are advantages and disadvantages to doing this.
Debt management: Beware of temptation you can’t afford
- Department stores often lure customers into applying for their store credit cards by promising a deep discount for the day’s shopping: “Save 30 percent on everything you buy today!” is a popular approach. Falling for this pitch can be bad news if you don’t have a tight hold on your spending. The credit card company is betting that you’ll charge more than you can pay off in one billing cycle, and will pay interest on your purchases. Finance charges can reduce or negate the benefit of the discount offered for opening the account.
- Opening too many credit accounts can “ding” your credit scores. Going to the ma
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