The cost of borrowing has also risen, with increased interest rates and fewer deals and discounted rates available. Customers in what the banks call the 'sub-prime' category (mainly people with a poor credit history, such as those who have missed repayments on previous loans) may find it particularly difficult to borrow at present.
What does the Bible say about credit?
The Bible has a lot to say about money, and Jesus was particularly vocal on the subject. His observation that 'No one can serve two masters ...You cannot serve both God and Money' (Matthew 6:24, NIV) is quite clear about ensuring our priorities are in order and thoughts of acquisitions are well down the scale. Paul is equally blunt in his letter to the Romans: 'Don't run up debts... don't always be wanting what you don't have' (Romans 13:8-9, The Message).
How should I respond?
How does this translate into practical, realistic advice today? Simply put, it means that if you do borrow, borrow cautiously. Don't take risks with your financial security - particularly if you have a family to support. And ensure that you repay the debt promptly, so that your reputation (and credit score) are not damaged by poor financial arrangements.
Just as the banks who relied too heavily on the availability of money in the markets found themselves in trouble, individuals who have a risky approach to their finances can also come unstuck if the source of their cash dries up.
It is crucial to examine your finances often, look closely at your financial commitments and budget carefully. If it is necessary to borrow money, you should be sure that you are able to meet the cost of repayments, allowing for interest rate rises and not relying on uncertain sources of income. An unexpected redundancy or change in family situation, can place a major strain on your financial resources, so it is wise to ensure that unrealistic loan repayments don't add to the pressure in such circumstances.
If you're new to putting your bank account under the spotlight, I recommend John Preston's book The Money Revolution (Authentic Media, £3.50), and the website www.themoneyrevolution.net, where you can download free spreadsheets to make the task of examining you finances much easier. If you have debt problems, however, speak to Christians Against Poverty (see www.capuk.org or call 01274 760720) or the Consumer Credit Counselling Service (www.cccs.co.uk or 0800 138 1111). They offer friendly, practical help.
