How good are you with your money?

UK has the credit of having one of the world’s most dynamic loan markets. But sadly the residents of this political entity are anything but money savvy. A recent research conducted by the online credit monitoring service http://www.creditexpert.com/ came up with some shocking facts. It seems that almost half of UK’s adult population are susceptible to making major financial blunders.


Retail therapy still on tops
Shopping still burns a major hole in the pockets of many a Britons. Shopping has unconsciously taken over the role of a psychiatrist. Retail therapy is by far a more pleasurable pursuit wherein one can drown their sorrow and get instant gratification. It seems 26% of the Brit population unload their wallet when feeling low, while 14% consider it as a stress reliever after a hard days work.


Ignorance is bliss?
Apparently not, especially when it comes to personal finance! Most young people are completely unaware of the fact that they have a period of six weeks to clear their credit card dues before it starts accruing interest. And that’s not all; missing credit card statements, missed payments of loans or mortgages are common occurrences.


Bad money management
The fact that most of us are prone to making serious financial mistakes is revealed by the policy of signing up for a new credit card to repay debts piled up against an already existing card. Despite repeated offline and online promotion of debt consolidation loans by financial lenders, it seems that there is still a section of the UK population which refuses to see its benefits. These loans can be used to clear off old debts and in the process rebuild the credit ratings.


Knowledge is power
The recent increase of bankruptcy and IVA filing is certainly alarming. People file for bankruptcy or IVA as soon as they find a difficulty in clearing their bills. The thing is: most of them have no clue about the effects of this step. IVA and bankruptcy are serious steps and should be considered as the last option. Bankruptcy and IVA reports will stay on your profile for a minimum of six years. This will harm your possibility of getting a personal loan in the future.


Jargon busters
Understanding the financial terminology is extremely important. Most borrowers are unaware of their own credit agreements because they have not bothered to clarify their doubts with their lenders. Unscrupulous lenders can take advantage of the loan seekers ignorance and manipulate the terms and conditions to their own advantage. One simple example is that of the typical APR that is advertised on the company websites. But the APR that is charged by the lender varies from the typical APR and greatly depends on his lending policies and the loan seekers credit ratings.

A proper understanding of one’s own credit situation is extremely important so that you can take a more balanced decision which will undoubtedly help you in managing your money better.