I consider myself incredibly fortunate, in that I have a dread aversion to debt, mostly thanks to my parents, whose eminently sensible approach to money has rubbed off on their eldest child.
Accordingly, I treat credit cards as a convenience rather than a loan and pay off my bill in full every month. If ever I needed a reminder that this is an excellent strategy, it came recently when my credit card provider sent me details of their new terms.
As of April, any payments made will set first against those amounts attracting the lowest rate of interest, thus allowing them to extract the maximum amount of interest out of you and, in the process, making it even more difficult for those in financial difficulties to extract themselves from their dilemma.
I accept that the days of cheap, freely accessable credit are probably over, and that less and less of us will be permitted to take out credit cards in future, bringing us into line with our continental cousins. However, I don't imagine that credit card companies see it as 'doing us a favour'.
There is a wonderful irony at work here. When times were good, credit card companies were delighted to increase our credit limits and tell us about all the wonderful things we could do with our newly found access to a line of credit, those adverts for Mastercard being but one example - flight to Barbados £600, new swimwear £45, interest to be paid on holiday you couldn't actually afford... er, priceless? Now we are being told that, regardless of our payment history, we should be reined back. Who, might I ask, tempted us into mass foolishness in the first place?
Over the years, my credit limit seemed to rise exponentially as though the better behaved I was, the more temptation they would put in my way. Indeed, I discovered at one point that I had a credit limit five times that of the then Chancellor of the Exchequer (although given Norman Lamont's tendancy towards illfortune, probably a good call). And now that they've discovered that I don't have limitless wealth, my credit limit is being 're-evaluated', shorthand for 'being cut'. Fine for me, but trickier for others.
It is time for us all to develop a more cautious approach to debt. However, perhaps a more gradual tightening might be more effective?