The DNA of Debt

With the country at the center of a global recession we take a look at how debt is created and how it's evolving.

Everyone knows the dangers of bad debt management but that doesn't stop Joe Blogs down the street (or the Bank of England) running up huge debts that they can't afford to pay back.

If you're luck you'll have a rich aunt (or the British Government) to bail you out, otherwise you've got some serious problems on your hands.

Where it all starts

Although buying products and services on credit isn't a new thing the way in which we pay off these debts has altered dramatically over the last 10 years. Before then the majority of people would pay off all their creditors at the end of each month (or on payday) and survive on what they had left. Nowhere days people are more than happy to have thousands of pounds worth of debt tied up in credit cards and finance options.

This in itself isn't always a bad thing so long as you don't owe more than you can afford and your interest rates are reasonable low.

The creditors are partially to blame by offering customers far more credit than they could ever realistically afford to pay back. While the customers themselves should never have accepted the offer in the first place.

Facilitating debt

The ease at which credit is handed out these days is worrying, with rise of the internet a consumer can see something they want, search for the best loan option and sign on the dotted line in the space of an hour.

The future

The banks and other lenders are slowly realising that they can't continue to provide credit to people who are unlikely to pay it back (it only took 10 years) so we're now seeing a decline in credit facilities which will continue... for now.

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