It appears that people who rely on short term loans to see them through troubled times are hiding the fact from their partners.
Moneysupermarket.com has discovered that 10% of people who are in a relationship have a prepaid card or credit card that their partner knows nothing about.
Kevin Mountford, moneysupermarket.com’s head of banking and mortgages, said individuals borrowing money from whatever source should make sure they are always on top of their transactions so that their financial situation cannot spiral out of control.
People taking out short term loans to meet unexpected emergencies should work out how much they need to borrow to see them through the emergency and never borrow more than they will be able to repay.
Mr Mountford when on to explain that people who are borrowing without the knowledge of their partner should remember that the money they are spending is borrowed and will have to be repaid eventually.
Meanwhile, the Citizens Advice Bureau has said that it’s too easy to obtain instant cash loans and the government should tighten lending regulations. However, Ed Davey, the consumer minister, said such a move could encourage people to turn to illegal loan sharks in desperation.
A lot of people find a payday advance a quick, legal way to get short-term credit. If the money is repaid promptly, this kind of loan can be cheaper than a credit card or unauthorised overdraft charge.
The government is currently conducting research but has not yet decided whether capping the interest rates on short term loans is the answer.