Think Money

Think Money

October 07, 2011 11:13 ET

Q4: A Good Time to Apply Your Debt Management Skills

LONDON, UNITED KINGDOM--(Marketwire - Oct. 7, 2011) - As the final quarter of the year gets underway, financial solutions company Think Money stresses the need for borrowers to tackle existing debts, rather than borrowing any more - as many lenders expect them to do.

When it comes to unsecured debt, the latest Credit Conditions Survey from the Bank of England clearly states that lenders expect an increase in both supply and demand in the fourth quarter of the year.

A spokesperson for financial solutions company Think Money commented on the forecast, reminding potential borrowers of the need to stay on top of their financial situation and think very carefully before taking on any debt (or any further debt).

"First of all, unsecured debt doesn't have to be a problem. In the right circumstances, a bit of credit can help people get the most from a special occasion such as Christmas / end-of-year celebrations. This needn't be an issue, as long as they're confident they can afford the repayments and understand how long it'll take to repay the debt in full - as well as how much it'll cost them in terms of interest.

"However, it's vital that people base those judgments on a real understanding of their financial situation. It's surprisingly easy for households to overestimate the health of their finances, which is why we stress the importance of carrying out a regular review of their debts and other financial commitments. Not just the monthly cost, but the 'bigger picture': what the long-term impact of their debts is likely to be.

"We'd advise people to do this when something significant happens or is likely to happen - a wedding, for example, a divorce, a death, a house move or a new job.

"Equally important, we'd advise people to review their finances on a regular basis at least once a year, even in the absence of any life-changing events. Prevention really is better than cure, so now is an ideal time to do just that: before we get carried away with end-of-year celebrations, running up fresh debts that can take months to recover from.

"It's not just a question of resolving to avoid debt at Christmas. It's also a matter of preparing for the inevitable costs in advance, trying to spread the financial burden over several months, rather than stretching December's budget too far and risking debt problems that could mean a miserable start to the New Year.

"And let's not forget that people in the UK are already carrying over £200 billion of unsecured debt, with some households carrying far more than their 'fair share' of the total. Millions of people who are already struggling with their debts would do well to work on their debt management skills - budgeting, economising, negotiating, etc. - without delay.

"Even a small improvement in their monthly finances can make a surprising difference over the course of a year or two, but that's not the only reason to do this.

"Sitting down and really making an effort to understand their debt situation can give people the determination required to resist the urge to borrow more. It's an urge which can be particularly powerful when it seems the rest of the country is 'living for today' and determined to enjoy themselves at Christmas - whatever the cost."

Notes to Editors

Think Money is one of the UK's leading financial solutions providers, delivering a comprehensive range of financial solutions, including loan, insurance and banking solutions.

Think Money defines its mission as 'To educate, rehabilitate and advise on all aspects of financial management'.

For more information, you can visit the Think Money website at

Think Money's debt management section is located here:

You can also read our debt and budgeting guides here:

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