Psychiatrists weigh in on credit card, loan debt

By UK CreditCards.com

A large overlap between people with mental health problems and people with money worries has been revealed by psychiatrists.

In a new report, The Royal College of Psychiatrists suggested that as many as one in two people in credit card, loan or mortgage debt might also have some form of mental disorder.

Additionally, the report suggests that the credit crunch and economic downturn have worsened the problem by increasing many people's money worries.

Britain has been in recession since the end of last year and unemployment has risen to a 14-year high. According to financial charity Credit Action, the collective national debt stands at just under £1.5tn.

Each household that owes some form of unsecured debt, such as through a credit card or personal loan, is typically over £20,000 in the red.

Writer and broadcaster Stephen Fry, who also campaigns on mental health issues, has welcomed the publication of the study. He said: "My own bipolar condition has caused me to go on many giddy spending sprees so I have first-hand experience of the difficulties of debt brought on by poor mental health.

"An understanding of the relationship between mental health and unmanageable debt should ensure that appropriate advice and support is provided to those who need it."

Credit card theft may rise in recession

By UK CreditCards.com

Evidence from prior recessions shows that credit card fraud rates rise when the economy does badly, credit bureau Equifax warned.

According to the credit reports provider, card customers should take steps to improve their personal security in order to limit their chances of falling victim to the crimes.

Figures from CIFAS, the UK's fraud prevention service, have shown that impersonation fraud rates rose by 43% over the first six months of the year, when compared with the same period in 2008.

This total included cases where bank statements, passports and credit cards are stolen through muggings or burglaries and then used by the criminal to take out other financial products in their victims' names.

Neil Munroe, external affairs director for Equifax, commented: "In some respects, historical evidence has proven that when times get tough identity theft and fraud does increase.

"People do need to be aware of that and do need to take major precautions these days to make sure they don't become a victim."

Common ways for people to protect themselves against identity theft include keeping passports locked away at home and always shredding old bank statements.

CIFAS has also tracked a 16% annual rise in general UK fraud for 2008.