Banking woes ‘should be a wake up call’

The serious problems affecting banking groups in the US and in the UK should act as a wake up call to consumers across the country, it has been claimed.

According to Callcredit, the recent collapse and emergency bail out of Bear Sterns should prompt people with debt management issues on both sides of the Atlantic to reassess their personal finances.

The credit reference company is convinced that the problems that have caused both Bear Sterns and Northern Rock in the UK to face disaster are bound to have a knock-on effect for the world economy and for all consumers.

“In an attempt to avoid debt, consumers need to move away from the ‘buy now, pay later’ attitude and move towards the ‘save now, buy later’ mentality,” said Mel Mitchley, director of industry relations at Callcredit.

A report released last year by the Grant Thornton accountancy firm revealed that the UK’s personal debt is now worth more than its annual gross domestic product.