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OFT Issue Revised Guidance

Today the Office of Fair Trading has issued a revised guidance consultation report for the debt management industry. You may remember that they issued their first report into the findings of a report they did where they found 129 debt management companies acting unfairly. Today’s report clarifies that debt management companies must:

Since their first review on September 2010 along with the 129 companies that were warned, 43 chose to give up their licence and the OFT took action to have the licence removed from 11 other companies. To read more about Payplans role in the OFT report read our earlier blog post by clicking here.

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Credit Cards – What Are They?

Credit cards are a quick and easy way for you to pay for something that perhaps you can’t afford at the time of purchase. Some people find it easier to pay for something by card than with cash, however falling into the ‘credit card trap’ can be dangerous and very difficult to get out of.

What is a Credit Card?

A credit card, as it says, is a card that allows you to spend on it up “to a set amount. Credit cards are usually issued by banks and large companies and some retailers also offer something similar called a store card. All credit cards, as mentioned, will have a credit limit and will also have a minimum monthly repayment that you are required to pay back, with the ultimate aim of paying the credit that you have borrowed. Your credit card will charge you monthly interest on all purchases and cash withdrawals, unless you have a new card with a 0% interest deal.

Credit cards, when used correctly can be very beneficial, but if you fail to pay the full outstanding balance at the end of each month due to the high interest you can find yourself struggling to get the balance back to £0.00

There are currently more than 60 million credit cards in circulation in the UK. In August 2010 outstanding credit card balances stood at £58.5billion, with that figure no doubt even higher now. 69% of credit cards had an outstanding balance on them according to the BBC and whatsthecost.com.

If you are still unsure about anything call one of our specialists who will always be happy to help 0800 2802816.
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What Are Your Reasons For Debt?

Thousands of clients call us each week as they struggle repaying their debts. Our specialists speak to hundreds of clients a day, all of whom have varying reasons for their current financial difficulties. Many people have a common misconception that to seek help implies that you may have been irresponsible with your finances; and therefore you should deal with them yourself.

We, on the other hand, at Payplan have many years of experiences and understand that there are many reasons why you may get into debt or struggle with your debt.

I want to go through a few of the most common reasons that we see on a day to day basis.

Reduced income/ Redundancy

A very common story, from my experience, is a person who has taken out credit and has originally been able to afford the repayments comfortably and then as the recession hit they were either made redundant or they lost their overtime and their income dropped. When this happened, payments that were originally affordable suddenly become impossible to meet. In this situation we go through our client’s income and expenditure and make sure they are claiming any benefits that they may be entitled to. If you have been made redundant then you may not have enough money to spare to arrange a debt solution at the moment, but we will still be able to assist you in making token payments until your situation improves.

Divorce or Relationship Breakdown

Separating from your partner is a bad enough experience, but when you have debts this can add further pressure. If you have debts and you both contribute to the household, when one income disappears and your outgoings remain the same you are likely to start struggling to maintain payments for everything. In this situation we would go through your income and expenditure and where possible we would assist you in setting up a plan so that you can pay your debts back. If the debts are joint then your ex-partner, who is still also liable for the debts, will have to agree to pay their part of the debt.

Illness

If you have been working full time and receiving regular income, if you suddenly become too ill to maintain the same level of work and have to either leave work or reduce your hours, it is at this stage that we often see people struggling. In this situation we would ask you to check that you are receiving all of the benefits and help that you are entitled to and go through your income and expenditure with you and assist with setting up a repayment plan to deal with your debts.

These are just a couple of situations that our clients find themselves in before contacting us. We do see lots of different situations and our specialists are fully trained to help you regardless of how you found yourself in your current situation.

If you are still unsure about anything call one of our specialists who will always be happy to help 0800 2802816.

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What motivated you to contact us?

We recently asked a number of our clients at what point did they decide it was the right time to contact us. From the 1,300 of responses we received there was a clear pattern as we split them all down into 11 different categories.

The most common reason for people contacting us, with 33%, was due to them losing control of their finances and realising that they need to once again regain control and deal with their debt problem.

13% of the people we asked decided to contact us after their debts caused them too much stress or they became too desperate and needed some assistance in dealing with their creditors.

The third most common reason that prompted contact was from people who wanted to switch provider from a fee charging company to one that is fee free with 11% of people giving this as their reason.

A surprising and slightly alarming figure showed that 6% of the people asked said that they were being chased and/or threatened by their creditors, which is what prompted them to contact us.

Other reasons included: recommendation from a friend (10%), recommendation from a Citizens Advice Bureau (9%), recommendation from a creditor (7%), research (5%), recommendation from work (1%), payday loans (1%).

If you are still unsure about anything call one of our specialists who will always be happy to help 0800 2802816

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