Risky credit and getting back on track

About Danielle

Danielle is an adviser on the Shelter helpline.

It can seem like a good quick fix to keep a roof over your head but what happens when you to come to rely on credit to cope with your regular housing and living costs?

"Pressures can pile up, make sure you get help early", Danielle, Shelter Helpline Adviser

When Ali called the helpline she’d made her last four rent payments by using her overdraft because of a drop in her salary. In the meantime the overdraft charges were eating into her small amount of disposable income.

In the last couple of weeks major car repairs meant that she was faced with an unexpected hefty bill. Ali’s car was vital to get her into work so she put it on her credit card.

With mounting debts, next month’s rent to worry about, and mentions of redundancy at her office pressure was piling on from all sides. Things were starting to spiral out of control and she was tempted by the thought of a payday loan to get things back on track again.

Overdrafts, credit cards and loans can all be useful, but when you’re depending on them regularly for living costs the debt can soon rack up.

It can be tempting to borrow more, but you could also be left with high interest rates, mounting charges and late payment fees.

There could be other solutions available. Like Ali, you might want to explore these options first before committing yourself to any new payments.

Top Tips:

Draw up a budget– It can be tough to start off, but it’s one of the most useful tools you have at your disposal. Use our free budget calculator to see just what you have coming in and going out.

Prioritise your payments– Priority debts should be your first focus. This means paying your rent or mortgage first and any loans secured on your home, followed by your council tax and utilities. This is because the action that those creditors could take against you if you fall behind can get a lot more serious more quickly than that for other debts such as unsecured loans, overdrafts and credit cards. Read more about priority and non-priority debts here.

Call in the experts– You don’t have to go through this alone. Talking about money at the best of times can be awkward and seeking advice from people close to you can sometimes feel difficult. Speak to someone independent about it as soon as you can. Contact a specialist debt adviser. They can give you some practical help with dealing with your debts.

If you still feel further borrowing is the only way, the Money Advice Service can give you some helpful advice on the different types of products available and what the benefits and risks are.

If you’re in a similar situation to Ali and worried about credit card or other debts, you can find help with loans debt and bankruptcy and other issues on our Shelter advice pages.


Danielle is an adviser on the Shelter helpline.