Can any of you financial types tell me how the "looming credit crunch crisis" is going to affect people like me?

[EasterBunnylicious]

I'm too young to really remember the impact of the last recession really, so I am just wondering what the supposed credit crunch crisis will mean for me.

I am married with a baby, work for the civil service and am in rental property. We have I would say medium level debts (student loans, a few thousand between us on credit cards, not being used but being paid off). No savings. (well, except for the £100 in premium bonds I desperately cling on to!)

I am just wondering how the credit problems will affect me. I don't want any more credit cards (except maybe to balance transfer), we would like to buy a house eventually but are no way in a financial position to at the moment. What can people in my position expect in the near future?

Hello

How are you? I am pretending to study as usual! I was looking at the impact of the cc and found this report which talks about the impact on savings, borrowing etc..

try here

Hope all is well xx

and here is a 30 second guide to cc

here

I would say the effect has been greatly exaggerated.

What's happening is that banks are stopping lending so much so it will be difficult to take out new credit. This will affect house buyers but you are not in that position yet. And in any case, interest rates are so much lower this time around, even mortgage payers won't face the same problems as last time.

During the last recession, interest rates went sky-high (15%) and this is not going to happen this time. Interest rates are very low and getting lower not higher.

The only thing I would worry about is if your credit card company decided to call in outstanding loans or up the rates on your credit cards. But you are paying off the loans anyway so actually I'd say you were in pretty good shape. Student loans unlikely to be affected.

As you rent, the impact on the housing market won't affect you.

oooh hellooooo lcy. How are you?

Sorry M&J thanks for your post too!

I guess that you need to look at how secure your job within the ciil service is. The public sector has grown enormously over the last 10 years, and if there is a slowdown (becuase of course we never mention the r word), then there will be pressure to cut public spending and taxes.

Not really an issue for me I don't think. I work in a department that is more likely to expand for the foreseeable future. I am pretty lucky in that respect, though the same can't be said for my DH, he works in retail.

i have been wondering about this too. both me and dh work for the same hp finance company. really hoping that the hype and fuss doesnt come to anything much as i can see our sector being the worst hit.
at the mo though business is the same as ever, its all very complicated isnt it!!

Interesting question. I think the safest things to do are:

a) minimise debt
b) get any you have onto 0% if you can as these deals will potentially disappear at some point
c) save if you can
d) look at reducing any costs if you can
e) make sure you perform at work
f) be prepared to do (almost) anything to survive a recession, another thread mentioned a professional working as a taxi driver during the last recession

The Motley Fool have been runnign articles about how to manage and moneysavingexpert.com is a good site too