IN response to your recent stories about debt and hardship, I’d remind readers that people end up in debt for a variety of reasons.

Some have met with misfortune, others have faced radical changes to anticipated income and some will have been naïve and gullible, while others will have made ill-advised decisions or be lacking skills of basic budgeting.

Humans have a natural tendency towards instant gratification – our brains are hard-wired to favour immediate pleasure over pleasure deferred.

In times past, credit was restricted and tightly controlled and instant gratification was dependent mainly on the cash that you possessed. In an era of freely-available credit this is no longer the case. This is the problem with financial de-regulation: it’s no use setting the hounds loose unless you give the fox – the consumers – some basic knowledge and skill to out-smart the hounds.

Whatever the reason for resorting to borrowing from a pay-day lender this is a sign of crisis and desperation, but it may well be the only source of credit a person is able to access.

Not unnaturally, this economic transaction is one in which power lays with the lender and they use every conceivable tactic to maximise their advantage.

Don’t some loan companies give advances by way of a cheque and then charge the borrower for cashing it? In one recent story in the Lancashire Telegraph, there is mention of a 2.9% casement charge plus a £3.50 handling charge. This means someone borrowing £100 would have £93.60p in their hand after paying £6.40 in charges for encashment. Is this correct?

Often credit unions require members to demonstrate some degree of thrift before granting a loan but there will be no charge for cashing the loan cheque and I know that at some credit unions, the debt is insured in the event of the member dying.

Kevin, Colne (via website).