Category Archives: Go Frugal

The Spike In Unsecured Credit – A Sign Of Return To Better Times

After half a decade’s credit deprivation, people in the UK have begun seeking and getting credit again. Unsecured debt rose by 9% in 2014, higher than it has been in over seven years. Roughly translated, that amounts to approximately £9,000 in unsecured debt per household. And that is projected to rise to £10,000 per household by the end of 2016.
Before we all chime in with festive dances and happy songs, we might give a thought to whether our renewed love affair with credit is in our best financial interests, as individuals and the Kingdom as a whole. For one thing, we need to look at the kind of credit we are taking advantage of, and how well it serves our financial needs.

The types of loans that are gaining popularity has shifted

Payday loans – There was a time not so long ago that payday loans were typically a borrower’s last legal source of available credit when no other sources were available. There was even a bit of a stigma attached to such loans and the people who sought them. With the economic crisis, that all changed. When even some of the formerly credit-worthy individuals couldn’t convince their long-time bankers to approve loans such as had been readily available to them prior to the crunch, it was inevitable for those newly-rejected borrowers to look elsewhere. Payday lenders had correctly anticipated this emerging market, and geared up for it. The rise in popularity of payday loans caught regulators by surprise, and there were many abuses by lenders before the government set caps on how much they could charge in interest, fees and penalties.

Despite the higher cost of payday loans, they became the most popular form of credit in the UK, and with the constraints included in the new regulations, the abuses by payday lenders have diminished significantly, rendering the loans more popular than ever.

Credit cards – Issuing companies have in the recent past engaged in such aggressive marketing practices that they have caused the government to look more closely into and apply additional restraints upon those practices. The companies still tend to avoid issuing their cards to individuals in high-risk groups, such as those just beginning to establish credit, those with low income, self-employed individuals and those with a history of credit problems.

However, they continue marketing to people who have a history of making minimum payments, despite the fact that such individuals are likely to exhibit a pattern of financial difficulties. The card companies accept the risk in approving such individuals because the minimum-payment accounts are easily their most profitable, offsetting the risk that some will default on their payments. Because credit cards are easier to obtain than traditional loans, their popularity continues to rise.

Instalment loans – These loans are typically for relatively small amounts, and are made on a short-term basis, often with greater flexibility in repayment than payday loans. While they usually offer lower interest rates than those charged by credit card companies or payday lenders, their rates are still somewhat higher than those applied to more traditional loans.

Instalment loans also offer the borrower a more stable payment schedule than payday loans or credit card balances, so that the borrower knows ahead of time exactly how much the monthly payment will be. This can be particularly helpful to the borrower’s efforts to set and adhere to a budget. Instalment loans are marketed primarily to individuals whose credit history places them in a lower risk category than those who routinely seek payday loans or credit card advances. Interest rates and terms can vary significantly between lenders, and while the loan might not be approved and processed quite as quickly as a payday loan, the delay can be offset by the reduced cost of the loan.

Our return from the financial abyss of the last seven years has been a long and tedious one, and it is reassuring to see conditions improve. Hopefully, we have learned a lesson in the process, and will strive to keep a tight rein on our indebtedness. We are only human and it is understandable that we would jump at the chance to enjoy something to which we’d long grown accustomed, but which had been denied us for a number of years. Let us just make certain that we don’t allow our jubilation and renewed confidence to overshadow our common sense, and lead us back into that abyss once again.

Where to Sell Your Stuff Collecting Dust

With Spring comes Spring cleaning. It is an opportunity to sort through your belongings and declutter your living space. It can seem like a daunting task, but when you have the incentive to make a little extra cash and simplify your life, it should come easily. One man’s junk is another man’s treasure, and in the online world there is a place to sell everything.

Craigslist and Ebay have forever been the go-to websites when it comes time to sell your extra items. If you are looking for something new, there are plenty of other places to sell your stuff online.

If you are low on time and want to start selling immediately, the website Tinypay prides itself on ease and quickness. You do not even need to sign up for an account. All you need to do is post each listing with your PayPal account and you receive cash and e-mails through the e-mail account that you already use. It also allows for easy embedding of your listings into your social media sites, so advertising is a breeze.

If you are feeling a little more ambitious, there is a site for that too. Shopify is an entire store front devoted to your goods only. You can even accept credit cards and arrange for shipping through your store’s website.

If you want to deal with local people only, Craigslist is not your only option anymore. Zaarly allows you to sell to people in your area. It has a lot of cool features that eases the process of selling and coordinating exchanges. YardSellr is similar in that it allows you to deal with local people. However, it deals in niche products that you may not find on Zaarly. Through YardSellr you can customize searches as well as set up RSS feeds if someone in your area is looking for the rare Beatles portrait that you are looking to sell.

If you want to go the charitable route, KarmaGoat is your solution. It allows you to pick charities that the proceeds of your sales go to.

There is a solution specific to parents as well. ThredUP will send you a prepaid shipping bag to use to fill up with children’s clothes. They do the hard work for you and sell your items. You can either pocket the cash or spend it at their store for the next size up.o

If you have a collectible that you can’t see yourself parting with, the website called Keepio has a solution for you. Keepio will connect you will like minded people that share the same passion for comic books or other collectibles. Letting go of items with sentimental value is much easier when you know the new owner shares the same passions and interests. On the flip side, if you have an item that you can’t wait to get rid of and you need to vent before selling it, the Internet has you covered. Never Liked It Anyway allows you to post the story behind why you are selling your item, for example an engagement ring. There is definitely something therapeutic about venting while making extra cash in the process.

Now you have no excuse but to go out and sell all of the items you previously did not think you could. If it’s collecting dust and you haven’t used it in years, it is probably time to part ways. Once you get started making money off of your old junk it can become addictive. Living simply and recouping cash spent on old items is rewarding in itself but it also makes you think twice next time you are faced with buying an item.