A new generation on the never never

Tuesday 26th September 2017

There was a brilliant blurb for one the first credit cards in the early 1970s – ‘takes the waiting out of wanting’. It was a plastic version of what my mum and dad used to call the ‘never never’ and became a way of life ever since.

If you think about it, personal unsecured debt has led a charmed life – surviving scorching interest rate rises, and a financial crash or two. And of course ignoring all the dire warnings about easy money and over borrowing. Feel guilty about those who simply save ? Are you kidding?

But it’s a problem which is now deeply seated in all our lives. Some hair raising stuff this morning from a credit scoring agency called ClearScore which has found that one third of teenagers will take out credit within a month of turning 18; by the time they’re 19 more than three quarters will be on the never never, and 60% don’t even question it, saying it’s part of adult life.

Which of course it is, and that’s the real problem. How many adults bother to question their credit card spending, or even know the meaning of APR, for example ?

So another generation is floating on debt, helping to spin the plates of a consumer society which appears to know no gravity. That of course will all change when the Bank of England increases interest rates, as it surely will. In fact the longer it holds out, the more severe it’s going to be when it eventually happens.

Most worrying from the report is not just the numbers, but the fact that for the majority of the teenagers surveyed, their parents have never discussed the importance of finance with them. And of course the final, inevitable finding. That when it all goes wrong, the kids expect to  be back at the door of the bank of mum and dad. “Twas ever thus.

Michael

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