subject: How not to be a credit GRINCH this Christmas [print this page] How not to be a credit GRINCH this Christmas
Christmas is a trying time if you're unlucky to be one of the GRINCHs identified.
Rather than being green and annoying, a GRINCH is someone belonging to the Generation Recognised In Need of Credit Help. This generation is, according to the Co-op, aged between 24 and 35 and feels obliged to seek credit to pay for Christmas festivities.
The worry is that this desire for credit makes them more likely to consider options that could have serious long-term consequences than a credit card comparison.
According to a survey conducted by Co-Operative Electrical, one in three people in their mid-twenties and early thirties feel that Christmas can only be successful if they borrow extra money to pay for it to be.
Over half of these are unaware of how much interest their existing debts are incurring.
The GRINCHs identified by the survey are over twice as likely to have applied for a loan or overdraft and been refused. In this case, one in three of them are prepared to make up the perceived shortfall by borrowing on a credit card although the research doesn't say whether they'd only use 0% purchase credit cards.
The biggest potential problems arise from the GRINCHs who would consider options such as home-collected credit, unauthorized door-step lenders and payday loans. Despite the annual interest rates of these forms of credit reaching 270%, the survey found that one in ten people would consider this form of credit.
For those without access to mainstream credit there is always the much-friendlier option of the community credit union. However, according to the report only one percent of people make use of them.
This could change, however, due to the development of one-of-a-kind schemes to encourage people to use their community credit unions.
raised concerns over the implications for individuals and their communities of poor money management and a lack of comprehension regarding the true costs of some forms of borrowing.
He points out that increasing numbers of people are feeling financially pressurised into putting themselves in risky borrowing situations without fully considering the long-term costs or available alternatives.
One such alternative is the community credit union - an organization perfectly designed to provide members with the ethical and affordable credit they need to avoid being preyed upon by ruthless lenders away from the mainstream bad credit rating credit cards lenders.
The pilot runs of the scheme have proved successful and the company has announced that it will roll out the scheme to all UK credit unions.
Under the scheme, all GRINCHs, families and individuals will be able to access some products and services at the same time as being able to borrow at reasonable rates from their local community credit union.
Credit unions are legitimate financial services businesses that are regulated by the Financial Services Authority. They are managed and run by their members and provide the community with easy ways to save, affordable loans, simplified bank accounts and the knowledge and skills needed for good money management.
