Double dip risk to make card debt worse?

Bad economic news makes a recession more likely and a mockery of the prime minister's suggestions that people should seek to tackle their credit c…

Bad economic news makes a recession more likely and a mockery of the prime minister’s suggestions that people should seek to tackle their credit card debt, the Trades Union Congress (TUC) has said.

Speaking after the Office for National Statistics issued a revised estimate for gross domestic product (GDP) of only 0.1 per cent growth in the second quarter for this year – compared with the original figure of 0.2 per cent – Mr Barber said: “The economic news just keeps on getting worse.”

Attacking government policies, he added: “There is now a real danger of the UK going back into recession.”

Turning to suggestions made by David Cameron that people should be cutting their credit card debt, Mr Barber said: “Of course people should be sensible about paying back unsustainable debt, but the truth is that the government is relying on people borrowing more.”

As a result, this is advice that George Osborne “must be hoping” that cardholders do not heed, he stated.

The comments come after the passage in Mr Cameron’s original speech appearing to urge people to clear their credit card debt was re-written to indicate that people are doing just that after the original transcript sparked a debate about its implications for the economy and individuals.

Meanwhile, the GDP news was also picked up on by shadow chancellor Ed Balls as a reason to attack government economic policy, arguing that the increased taxes and cuts in spending have gone too far and have “killed the recovery”.

He accused the prime minister of “lecturing” hard-up consumers about paying off their cards at a time when many are struggling to make ends meet.

Posted by Paul Thacker

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  1. Yes thankyou for this post , this was one thing that was bothering me , if i wanted to make an early payment on an iva.

  2. You have explained the IVA process very well. Generally, people are not willing to talk about their debt problems but for those who want to come out of debt by paying a lump sum, a full and final IVA settlement would be the best option.

  3. CAN ANYONE HELP PLEASE ITS A LONG STORY
    I am in an IVA and have been in mine for 4 years and 1 month so only have 11 to go my husband had a coach crash and is fine but dvla have taken 5 months so far investigating if he can drive but in the mean time he can drive but insurance wont insure him until they have made there final decision. we have been awarded a large sum of money from a ppi we want to use this as a full and final settlement as we are in an agreed breach for 6 months because our joint income is not even enough to pay all our bills let alone food. this ppi is from a loan that was repaid 4 years before we entered the iva I think that the money should be used as a full and final settlement as this amounts to more then the last 11 payments that we still owe. pay plan are saying that the money must got to the debt as extra and we can then offer the 8% interest as a full and final settlement can they do this as we have other ppi’s that will go to the debt as the company’s are included in the iva I don’t have a problem with that. as my income has dropped drastically due to my daughter leaving further education we will never be able to pay the monthly instalments as when the iva was taken out I told them our income would come down drastically when she leaves school and they were not interested so from the start of my iva they new I was going to fail

    1. Hi Tina. I am sure an advisor from the team at ClearDebt can help however I would recommend you copy and paste your query into a new question on http://ask.cleardebt.co.uk and that way all of them will get notified of it and you’ll receive the best attention.