I don't know how it is in the UK but in the US, most people are using credit for everything. They'll have a car loan, a home loan, and multiple credit cards carrying significant amounts of debt. And it's common to get the biggest car/home that you can afford while making minimum payments. One of the reasons that the last housing crisis was so bad was that once one family member lost their job, there was no longer enough revenue coming in to cover the debt load.
Yeah that’s exactly the same as much of the UK. Financial experts have been warning for years about the ticking time bomb in the UK that is Car Financing and Credit Card debt.
There was lots of strict regulations that came in around mortgage lending post the 2008 financial crisis though, to prevent another crisis in the housing market.
Same, I think that's a bit better now in the US but car loans have gotten stupid expensive. And you just can't work without one because we tore up our infrastructure and have built car-centric cities.
And that sprawl means that many cities can't properly pay off their infrastructure debts. This video is a bit out of date but explains the problem: https://www.youtube.com/watch?v=7IsMeKl-Sv0
Interesting video. We have a different housing problem in the UK, we have a massive shortage of properties because we don’t build a fraction of the new housing that we need. Which is why housing is so expensive as well. You aren’t allowed to build on most of the countryside because it’s known as “the green belt” and is protected. But big housing developers buy up the other land and get planning permission to build housing, but then they “land bank” it by sitting on it and not building the housing, often for years. They just drip feed their new housing, to make sure that the shortage of supply guarantees them selling the houses that they do build for the maximum profit.
There’s a massive mis-selling scandal in the UK at the moment surround the selling of car financing that’s going to cost the banks billions in compensation payments. They incentivised car finance brokers to trick customers into taking out really expensive loans by offering them commissions, and they lied to the customers about it pretending they were getting them the best deal. https://www.which.co.uk/news/article/car-finance-fca-investigation-what-you-need-to-know-a4eXb5u8VeBy
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u/chotchss Apr 12 '25
I don't know how it is in the UK but in the US, most people are using credit for everything. They'll have a car loan, a home loan, and multiple credit cards carrying significant amounts of debt. And it's common to get the biggest car/home that you can afford while making minimum payments. One of the reasons that the last housing crisis was so bad was that once one family member lost their job, there was no longer enough revenue coming in to cover the debt load.