Letter: High price to pay for 'easy money'

THE phrase in your article 'A Life To Die For' (1 August) "living within your means", seems self-evidently common sense, but people fall into the extravagance trap for reasons other than "keeping up with the Joneses". Principal among these is easy access to finance.

Banks lend out far more money than they have in reserve, while credit card firms require as little as 2.5 per cent of the monthly total to be paid, leaving the remainder to attract interest. This means that paying 2,500 for a holiday will need a payment of just over 60.

Before credit cards, deferred payment required finding a guarantor, then making a one-third deposit, followed by fixed monthly instalments. Credit card companies should be compelled to apply a minimum repayment of 25 per cent of the monthly total, in default of which the full amount would become due.

Robert Dow, Tranent