Debt " Holidays " !

To those with a maxed out credit card, the offers from the banks seems just too good to be true.  Simply transfer that credit card balance to another banking institution and the interest will be waived - for periods as long as fifteen months.

That can be an opportunity to get a person's finances in order - if it is handled properly.   The customer needs to remember that the debt does not just " go away ".    To be properly managed, the amount owing needs to be divided by the number of debt free months - and that figure made as a monthly payment so that the entire debt is eliminated during the debt free period.

No doubt some artful dodgers will see interest free periods as the answer to their money problems.   Simply keep moving the debt to a new institution whenever the debt free period expires -  and it remains in limbo forever.   Unfortunately, life doesn't work that way !    There are one hundred and twenty four debt holiday deals on offer from banks, building societies and other financial institutions - but their credit  assessing bureaus keep a close track on credit worthiness.

People with money problems have other avenues for relief.  They can enter a government approved debt management scheme in which outstanding debt is frozen from further interest payments and repaid over a nominated period of time by an agreed monthly amount.  This tends to free up the income stream but it also requires the debtor to stick to a budget and pay cash for new purchases instead of racking up new debt.

The last resort for many is to declare bankruptcy., but this carries with it many unpleasant side issues, including future debt refusal long after the bankruptcy has been cleared.   There is usually an ongoing stigma and many job opportunities are closed.  For instance, a bankrupt person is ineligible to stand for a seat in parliament.

Managing personal debt is a skill that should be taught in schools.  Store cards and the credit card industry make credit look both tempting and easy and the unwise can quickly become encumbered with a debt load beyond their capacity to service.

Those making use of the banks " debt holiday " deal should be aware that various administrative charges still apply, and if the debt is unpaid at the end of the debt free period,  a new charge of about 22% is usually levied.

The wise get professional help to get clear of the debt trap !