Debt is a bad thing – personal debt

My grandfather was a milkman.  My mother (the milkman’s daughter) was very cautious about money and my father still is.  I remember when the bank sent us a credit card through the post and my father cut it up.  He had not asked for it and he did not want it.

I was taught that buying goods on hire purchase was buying on the “never never” and was something we should never do.

I now have 2 credit cards which I use regularly and have had for years.  When I bought my second car I took out a bank loan (please dont tell my father).  My first car was so cheap you couldnt borrow that little!

When I went to university I got a grant and came out debt free.  My children had to take out student loans.  Most students these days also end up with large overdrafts.

When I finished at university I chose what job I wanted.  I was chatting to a barman the other evening and he said that he had just finished his degree and that jobs were hard to come by.

Why am I saying all this?  Because it shows how the world has changed over a relatively short period of time – within my memory.

In particular attitudes to debt appear to have changed radically.  My mother’s background was to be careful with money.  Today’s attitudes seem to be “borrow now pay later” and TV adverts are now offering “payday” loans with interest rates measured in thousands of percent compared to a bank base rate of only ½%.

This must be a bad thing because politicians are talking about what they should do about it – should they introduce a limit on interest rates which can be charged.

If my idea of introducing a ban on commercial lending is brought in, then all payday loans, credit cards and other forms of debt will be outlawed.  This will remove the problem of high interest debt, but will it create other problems?

I can see that there are reasons why people may want to borrow – a crisis when the car breaks down perhaps.  So the big question is – can we come up with alternatives?  Or are there circumstances when only a commercial loan will do?

So please comment on the sorts of circumstances when money is needed (and might now be borrowed) and what alternatives you can think of to commercial lending.