Bad Credit = Bad Idea

Judging from the lack of recent talk on the subject, we're apparently avoiding wide-scale problems linked to consumer debt so far. But a word of warning: the UK hasn't been so lucky:

Department of Trade and Industry figures showed a 37% jump in the number of people becoming insolvent in the second quarter of the year. The three-month total of 15,394 is the highest quarterly figure since records began in 1960.

The low interest rates of recent years pushed Britain's total personal debt levels above the £1 trillion level for the first time last year. The recent slowdown in the economy and last year's interest rate rises are being blamed for pushing some people over the edge.

One of the credit-card companies hardest hit by the wave of bankruptcies is responding by cutting credit limits and refusing more applications. That's one way to cut down on future debt, but perhaps not a positive step. The flexibility to spend is a clear plus if exercised wisely; the problem now is a bubble has deflates enough to expose a lot of unwise choices.

The bigger issue is ultimately one of consumer responsibility. Those now enjoying Saskatchewan's jobs boom, and even more importantly those not yet benefitting from the progress, should remember that payment deferred isn't payment avoided.