Early signs of financial trouble

As the UK economy continues to struggle, more and more people are starting to feel the financial pinch with many falling into financial trouble step-by-step. While trust deeds are becoming more and more popular in Scotland, as a means of escaping financial distress, there are many tell-tale signs of early financial trouble. We hereby list a number of situations which may point to problems ahead:-

Excessive use of credit card

While the credit card has proven to be one of the more popular financial instruments of recent times it also has the potential to drag people down and cause significant financial problems. If you are starting to see an increase in your credit card use then potentially you may be headed for problems in the future. In simple terms, many people are using their credit cards as opposed to cash or debit cards when they do not have cash to hand. If this is the situation and the economy does not prove in the short to medium term where does that leave you?

Expanding overdraft

While the vast majority of people in the UK will have some form of overdraft it is easy to forget that the interest rate on unauthorised or even authorised overdrafts is often significantly higher than that on credit cards and traditional loans. Many people see their overdraft as an easy option when running short of funds when in effect it is possibly one of the more expensive and potentially damaging financial moves. Once your overdraft is out of control your bank could call it in at any time and potentially leave you on the verge of bankruptcy or in need of a trust deed.

Switching funds between overdrafts and credit cards

As the recession continues to bite more and more people are using overdraft funding to cover their credit cards or credit card funding to cover their overdrafts. This should sound one of the loudest alarm bells you could think of as you are literally using borrowed money to pay off other borrowed money while increasing your potential interest payments in the future. If you are unable to survive without this type of financial transaction then you really need to think again and reassess your overall situation.

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