credit crunch

In some ways it is really not surprising that Britain is suffering from a credit crunch, this country is addicted to credit, and rather than seeing this as something bad, tries to turn all kinds of indebting schemes into “deals.” For example, there is the national obsession with 12 month binding contracts on everything. Take my mobile phone as an example. If I were to have a contract free phone, with the right to change companies at anytime, and to only pay for the minutes I use on the phone it would cost me about 350 pounds for the phone, and another 100 or so pounds a month for the amount of minutes consumed. However, having signed a binding 18 month contract, I get the phone (crackberry) for free, along with free internet, free texting, AND free international calls…for only 35 pounds per month. Obviously this is the cheaper deal, and I would be stupid not to take it, especially as all my family and many of my friends live abroad. The money is removed from my account monthly, and I never even really notice it. However, I don’t like these kinds of schemes, and it annoys me that they are generally the best deals in this country. I think part of the problem in England is that the country seems to always balance its finances on money it hasn’t actually received yet, and has no way of coping should anything go wrong. Thus, the moment I signed up for my phone deal, I imagine my phone company saw their profit as 630 pounds (the amount I will indeed pay over 18 months) and not 35 pounds (the amount I paid this month). I could jump the country tomorrow, sell the phone on ebay, and there would be nothing the phone company could really do about it, yet when people do pull such a stunt, these companies often don’t have the resources to cover the losses. The tendency here is to “mortgage” everything, and not think about the outcome being anything other than ideal. I had thought that some of this would end given the current crisis, but the opposite seems true. Firms appear more desperate than ever to get you to sign away 12 or 18 months of your finances. My contact prescription ran out this month, and I went by Boots’ opticians on my lunch break to find out the cost of getting it updated. It seems it is 50 pounds for all the exams, then 30 pounds per month for my contacts (ie the same as this past year). However, the woman assured me, if I would just sign up to their 12 month direct debit scheme, all exams and after care would be free, and the contacts would cost only 25 pounds per month, saving me 110 pounds over the year, and even more if I wanted new glasses. I groaned. I cant deal with another one of these direct debit schemes, and my Russian insurance policy (amazingly) covers all eye exams, so I politely declined the offer. Surely there is a better way to pass deals on to customers without locking them in for commercial eternity?