Neither a Lender Nor a Borrower Be

I remember my grandmother once told me "neither a lender nor a borrower be".  Whenever a neighbour came to ask to borrow "a cup of sugar" she would give it to them rather than lend it, else they would be "short" the following week when they had to give it back.  The same principle should apply to money.  If you hold a credit
card, it is not "free" money even though it may feel that way whilst you are using it.  You have to pay it back. 

My parents have never held a credit card nor taken a personal loan for the simple reason that they believe if they cannot afford it then they cannot have it; something that was instilled into them at an early age.  In recent times however, borrowing seems to be the norm, whether it be from personal loans, credit cards or taking out a mortgage to buy property.  Total credit card debt in the United Kingdom alone stands at over 54 billion GBP and Britain’s personal debts are increasing by one million GBP every four minutes.

Banks and Building Societies make it all too easy to borrow money.  They offer credit cards at six months free interest or at a low interest rate.  Mortgages are offered at various rates and everyone is in competition with each other.  People are actually encouraged to have a credit card for without it you cannot obtain a credit rating. Without a credit rating there are certain things that are not available to you such as a mortgage offer.  If you want to take your first step on the property ladder, you will no doubt need a mortgage; to get a good credit rating you need to have a credit card and pay it on time together with other household bills.  Unfortunately, holding a credit card makes it very tempting to overspend.  The attitude is "buy now, pay later".  The problem with this is that when the credit card statement arrives it is all too easy just to pay the minimal amount, carrying the rest over to
the following month, with interest.  Thus you are paying a lot more for what the original item cost in the first place. Then the inevitable happens - the credit card is used to it's limit and you are then possibly offered more credit by your credit card company, thus getting deeper and deeper into debt.

Consolidating your credit card debts by taking out a personal loan is one answer; swapping one debt for another.  Unfortunately sometimes the only way out is to file for bankruptcy.

The words of wisdom of my grandmother have a lot to be said for them - neither a lender nor a borrower be.