Five Ways to Avoid Debt Traps

If you’ve watched television in the past year, you’ll have seen advertisements of the type that used to rule American channels. Some of them show people running over hillsides like they’ve found the pot of gold at the end of the rainbow. Some are bright, loud, and have actors miming the experience of desperately needing a ‘short-term’ loan of £500. The advertisers are payday lenders. And UK regulation is only starting to make it more difficult for these companies to prey on those who do not have the ability to avoid interest rates that can run to 5,000%.

Payday lenders take advantage of people who have no other credit options and are forced to rely on them for basic outgoings like gas and rent. But getting into debt is easy to do, and knows no social boundaries. From the solicitor with a lifestyle resting on a pay rise to the part-time worker, few people are free from financial uncertainty. The only certainty is that debts increase; and the only choices are to pay them off through earning more (rather than borrowing more) and spending less; or to never pay at all (if you have nothing worth taking away). So ...