Getting into debt has become an integral part of growing up it appears and we must all have witnessed at some time or other the heartbreak that this awful addiction has inflicted upon family members and people that we know.

The surprise is that it continues unabated, our ‘must have it now society’ is fuelled by easy borrowing and credit cards despite the banks making it more difficult to do so.

There is also no longer any stigma attached to the process of being made bankrupt and the consequences thereafter, it is almost seen as part and parcel of the deal, made all the easier in recent times by companies specialising in this area who can rid personal debts at the click of a finger while lining their own pockets.

The credit crunch has only served to highlight the problem that has been growing year on year for decades and it is quite scary seeing the details from this infographic and wondering what the future holds for a nation that is unable to pay its way out of debt.

Infographic by Money Debt & Credit

• We would like to thank the charity Credit Action for their help with core statistics

It is doubtful that there are many companies who have not had to make cutbacks enough in their business without having to look at cutting profits too.

Increases in the cost of fuel and energy alone mean that customers should already be paying more for a product than they were 12 months ago, but in many cases these increases have been absorbed by suppliers desperate to take an order.

This is all well and good if the customer pays for the goods promptly and within your company credit terms, but what happens when the outstanding account isn’t settled on time and what options are available to a business to collect the monies owing?

Some years ago during the last recession there was a lot of talk from the government to outlaw bad payers who were causing many small businesses the same problem as they are now. Predictably, despite talking the talk little was changed at government level and the problem still exists.

No matter how much you need an order it has little value if you spend the next six months chasing payment and no value at all if that customer goes bust.

These are things that should be considered before accepting any order but particularly from a company that you have not sold to previously.

The minimum that should be done is to pay a small fee to have a credit check done, but even that maybe too little as the data available can often be out of date and is based on the history of the client.

In these uncertain times it is worth employing the expertise of a company that makes credit risk assessment of your potential clients for you. They will offer a range of credit risk solutions often tailored specifically for your business.

Their assessment will allow you to make a more educated and accurate decision about the likelihood of them fulfilling their credit commitments as well as the affordability of their order.

You will probably be given historical balances and account status codes for the customer and in many cases can receive update alerts to give you a clearer picture of your customer and be aware of any changes in their credit status.

Minimising the risk at an early stage is the most sensible and cost effective way of dealing with new and existing accounts and will undoubtedly pay dividends further down the line.

Being able to budget during the season can be difficult, so many people tend to fall back on credit cards and overdrafts. This is where a prepaid card can work wonders.

A recent poll conducted by the Evangelical Alliance discovered that more than 50% of those questioned admitted to spending more at Christmas in 2009 than they could afford. Almost four in 10 (39%) of respondents used credit cards to cover the extra cost, while 33% said that it would take them more than six months to pay off what they had spent.

However, there is a better solution. A prepaid card such as those on offer from Cashplus can be used to help people stick to their Christmas budget this year. The card can be topped up from an existing bank account or with cash at any UK Post Office^® branch and then used to help pay for Christmas expenses. It is even possible to pay regular small amounts onto the card throughout the year to ensure that enough money is put aside, thus spreading the cost of Christmas over the year.

Reserving a prepaid card for Christmas will prevent any overspending and will help to ensure that other important bills are still paid throughout the season.

There’s very little that’s worse than entering the New Year and having to cope with charges relating to credit card use, overdrafts and borrowings relating to festive spending. A Cashplus prepaid card could help prevent this. As only the money that is loaded onto the card can be spent, there’s no risk of running up debt using a prepaid card.

Getting a Cashplus prepaid card is also extremely easy. No credit checks are carried out and everyone is accepted*, enabling those who may not have been previously eligible for a debit or credit card access to the world of online shopping. Add to that the fact that additional cardholders can be named and this means that it’s a great financial solution for the whole family. Younger family members can be issued with a card to do their shopping without having to carry cash. It will enable them to learn very useful budgeting skills and allow parents the opportunity to limit their spending.

While shopping online may be worrying for some people, the Cashplus prepaid Gold MasterCard^® offers the advantage of up to 27% Cashback as well as a free purchase protection benefit. This gives the user valuable peace of mind, making it ideal for online shoppers.

Of course, a prepaid card isn’t just for Christmas and can be used for holidays, online spending and more throughout the year. What better way is there to stick to a budget?

*Subject to the card issuer’s terms and conditions.

This is where short-term payday loans can come in handy.

Payday loans are short-term loans typically between £100 and £1,000 and lasting up to 31 days. The appeal of borrowing money to pay the bills or spend on holiday via payday loans is that the application process can be as quick as 24 hours, meaning that the money is available immediately and with minimum fuss.

Due to the country’s economic uncertainty, the increase in members of the public taking out short term payday loans has increased fivefold. With payday loans no faxing is involved, which saves time on applications, increasing the temptation for people to take out these short-term financial solutions.

Online application forms can take as little as two minutes to fill out and if completed before 14:00 you can receive same day loans. If completed after this time, the money is available the next working day, which is why payday loans are the quickest route to borrowing that extra bit of money you need to meet your monthly expenses. This also means that payday loans are often favoured over unsecure loans when it comes to borrowing money, as these usually take up to 28 days to be approved following the application.

Payday loans with no faxing means there is no lengthy paperwork; instead of submitting a cheque to cover the borrowed amount, quick online forms only require a name, address, phone number and basic financial information relating to the borrower in question. Tighter credit standards have meant that it is becoming harder to borrow money on a short-term basis. Payday loans have made this more accessible to the general public.

As with any loan, there are requirements that need to be met by the borrower in order to qualify for a payday loan. You must be in full-time employment and generally earning over £750 a month; this ensures that you are going to be able to pay back the sum at the end of the stated time and that you are financially stable enough to benefit from a short-term loan. You must also have an active bank account in your name and registered to your address with a debit card to qualify for a payday loan, something that the majority of people already have.

Interest is something that applies to all loan types; this means that in return for borrowing the money, you must pay the lender a sum on top. One of the stigmas involving payday loans is that people are cautious of the high interest rates. Typically, the interest rates lie around the 1,200 and 1,500 per cent APR mark, which compared to long-term loans can seem to some borrowers to be rather high. To put the rate into context, though, a practical example is borrowing £100 at an interest rate of 1,250 per cent for 31 days, which would require a total sum of £125 to be paid at the end of the period. Fortunately, there are no administration fees or hidden costs associated with payday loans that can often occur with longer term loans.

One of the main reasons for applying for a short-term payday loan is to keep you in arrears with other financial commitments you may have. Mortgage payments, credit card charges and rent are all payments that need to be met on time; payday loans mean that you can avoid late charges and therefore further costs sending you into the deeper spiral of bank charges and independent company charges.

Should you require an extension to your short-term payday loan, this option is also available from many lenders. Although it will obviously require more interest to be repaid in the long run, they allow you to borrow the money and roll it over into the next month. Companies usually require you to make some sort of payment to reduce the overall cost of the loan before allowing you to carry over the outstanding balance, but extending the time scale of your loan is an option.

Another benefit of payday loans is that people who are tenants can make use of the borrowed money, as the loan doesn’t require the borrower to be a homeowner. Poor credit ratings can also be a deciding factor when it comes to borrowing money, but short-term loans such as these are also available to people with low credit ratings, making them accessible to all needs and requirements. This is why payday loans sometimes encompass bad credit loans, as even people who are deemed to have bad credit ratings are still eligible to borrow money via short loans, as long as they are over 18 and meet the other banking and income requirements. With no credit checks carried out, payday loans can help to build back up your good credit rating if you pay off the due amount on the due date, or even before.

The only essential warning that comes with a payday loan is that they should only be viewed as a short-term solution for financing your commitments. Though they can be a particularly beneficial answer to borrowing small values of money for short periods, they should not be used as long-term solutions. Due to the high interest rates, payday loans are not advisable to solve ongoing financial problems for if you cannot afford to repay the total amount, the value you owe can easily spiral out of control.

We all dream of living the high life, spending at our will and without a money worry in the world. Sadly, for the majority of us, especially in today’s financial climate, a little bit of extra cash this month wouldn’t go a miss. If you meet the age requirements and you are able to pay the specified amount back, payday loans can be the perfect solution to ease you through to your next pay cheque.

The three ordinary mums reveal the rewards of living the eco high life in a unique video diary of their daily lives.

In the video they hope to show how easy it is to improve your eco credentials and demonstrate the day to day benefits of living a greener lifestyle – both to the environment and your budget.

Share their top tips for making practical changes to your lifestyle that will be kind to your purse and your plants.

Debt consolidation services, credit repair and direct mail all subsist off of the world’s obsession with credit cards. So, how does the view of consumer debt in the United Kingdom compare to that worldwide?

The UK is certainly among the most credit obsessed populations. The average household debt in the UK is about 8,600 pound sterling, excluding mortgage payments. One of the only countries with a higher average household debt is the United States, which boasts nearly 17,000 U.S. dollars per household, or about 11,000 pounds.

The two other major English-speaking countries, Canada and Australia, have high household debt. The highest is Australia, and Canada falls in just under the UK. Could it be that speaking English is part of the rationale? Far more likely, it’s the culture that has spread amongst these countries.

Major countries with outstandingly low consumer debt include China, Thailand, Indonesia and India. The proximity of these countries, both geographically and cultural, is likely the cause of these tendencies.

However, the contrast in the behavior of each country doesn’t stop there. It may be that the UK, US and Australia have very high consumer debt, but their saving habits are varied.

The US and UK have some of the lowest household savings of any country, while Australia finds itself comfortably in the mid-range of personal saving percentages. Indonesia, Thailand and India all have mid-range personal savings as well, but China has the highest saving percentages of the lot.

As a brief comparison summary, the UK has some of the highest household consumer debt and lowest savings percentages.

In an article on the BBC news site Knight reiterates the recent findings of the Bank of England’s Trends in Lending report, whose agents across the UK have reported that demand for loans from SME’s remains weak.

Despite UK banks lending as much as £500m to small businesses there are calls from some SME’s and their representatives to make more funds available.

Knight insists that adequate funds are available and that banks are committed to lend to viable businesses, after all the core business of the bank is to make a return for its customers by lending money to sound borrowers.

The report also suggests that similar to personal debt, many companies are attempting to pay off their debts rather than saddle themselves with more.

The crux of the article is that banks are prepared to offer finance at any level providing that the borrower is viable and can demonstrate the means to repay the money.

Historically in the UK  many small businesses have borrowed beyond their means and once saddled with an overdraft facility have simply attempted to increase the borrowing year on year.

This works ok in a normal or booming business climate, but during the financial crisis banks have had to become more aware of their own failings. Constantly increasing business debt to companies that do not have the facilities to reduce the burden is no longer seen as viable business to bankers and rightly so.

It is up to business owners to ensure that they have are viable and not bogged down in debt already before approaching the bank for increased finance.

More so than for many years, business borrowers will need a robust and sustainable plan for repayment of any monies lent to them, before the bank manager is likely to be interested in lending.

The Forum of Private Business claims that business owners are finding it more difficult than ever to access finance and indeed many report that they have had overdraft facilities cut, or withdrawn altogether.

In a separate survey the Federation of Small Businesses found that 25% of its respondents are unhappy with the support they are getting from traditional lenders.

Whatever way you look at it the traditional lenders that were rescued from the financial crisis by the previous government are still refusing to play ball with many small business account holders.

This is not always the fault of the banks of course as many SMEs are primarily sales orientated and will take an order at any cost, even when knowing that they may face a long wait for payment from the customer.

For these businesses collecting outstanding accounts is a secondary consideration that will never receive the same attention as obtaining an order.

There are of course other options to conventional banks when looking to finance the growth of a business and among these are Factoring and Invoice Discounting. Companies offering these services operate only in the business sector and should therefore understand your needs better than some of the more traditional lenders.

Factoring and Invoice Discounting are quite often considered to be same thing, this is not actually true and the basic differences are explained here.

Factoring is a process whereby a business sells its outstanding sales invoices or accounts receivable to a third party (Factor) at a discount, in return for immediate payment. This is a continuous process that ensures a regular cash input into the business each month and reduces the need to chase bad debts.

The Factoring company is then responsible for collection of outstanding accounts by providing a full sales invoice administration coupled with credit control and debt collection service, enabling the business owners to concentrate fully on growing the business.

Alternatively, an Invoice Discounting Company will lend your business money using the sales ledger as collateral, releasing immediate cash against sales on a regular basis.

The business owners retain full control of the sales ledger and remain responsible for the collection of outstanding accounts.

This article is intended as a very basic guide to Factoring and Invoice Discounting versus conventional banking in the UK for SME Businesses. Services in this sector are tailored to suit individual companies and anyone looking for alternative funding for their business should seek advice from the experts in this field.

The research shows that over 50% of credit card holders for instance have not reviewed their monthly payments or balance in the last year.

That figure raises to 82% for people who have overdrafts and 86% for those with personal loans, showing that generally once provision is in place the majority of us do not bother taking steps to control our outgoings.

The study reveals that people are not taking proactive steps to ensure they stay on top of their money – 53% of consumers have never checked their credit rating, despite it being possible to do this for free, and I have to admit to being among them.

And one in five (21%) are unaware that missing a credit repayment can harm their credit score with 25% believing that ignoring a County Court Judgment will not affect their ability to access credit.

Dr Jonathan Henderson, consumer psychologist sees this “as a classic manifestation of the ‘ostrich syndrome’, where people choose an out of sight, out of mind approach to their finances where the less you know, the less there is to worry about.  Often people kid themselves they’re in good financial shape but in reality it’s a different story, which is only revealed when bigger problems occur further down the line.”

For years we have campaigned for plain speaking jargon from financial institutions and now Capital One have taken it upon themselves to offer practical financial education advice.

To help consumers improve their financial management Capital One has launched its ‘Credit Made Clearer’ campaign, which features a series of short animated films explaining in an easy to understand format the key area of finance that affect us all.

The campaign is designed to offer helpful money management while also dispelling the myths and confusion that are ingrained in the world of credit and finance through a series of easy to follow and understand animated films.

Commenting on the new campaign Brian Cole, Managing Director, Capital One said: “It is encouraging that consumers believe they are on top of their finances but perhaps they need more support in order to ensure they do not make avoidable mistakes.  We hope that our approach, which combines animation and humour, will help more people to think about their finances and take simple positive steps to improve them.”

For more information visit the Capital One ‘Credit made clearer’ campaign and watch the series of video clips with helpful and easy to understand financial tips and information.

While it was not unexpected many have been left reeling at the severity of the austere measures announced by George Osborne, wondering what the next few years have in store for debt laden Britain.

Far from seeing a light at the end of the tunnel as many had hoped coming into the election, the government has laid out the finances of the country clearly for all to see and it is not a pretty picture.

For the general public the future may look bleak, many of us are already struggling to make ends meet and further cutbacks in the household budget will obviously prolong the pain, but generally being British we are prepared to face up to things and move forward.

Tightening an already strict budget is nigh on impossible and we are often being asked for advice and tips for money making or saving opportunities.

There is no easy answer, get rich quick schemes as we already know exist only for those selling the scheme and often the only alternative course of action is to resort to selling off unwanted household items at boot fairs  or on ebay or to sell unwanted gold and jewellery to a specialist.

If you have the time and some available finance it is possible to make decent money from buying other peoples unwanted items and selling them via the internet or through boot fairs and the like.

However this may involve having to register yourself as self employed and your earnings would then be subject to UK taxes and National Insurance contributions.

The next few years will undoubtedly take their toll, we may have to work harder or longer hours to survive unscathed and now is the time to prepare ourselves for the journey.