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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

To not be surprised that people get in debt..

42 replies

Kasterborous · 01/06/2013 14:27

When the banks are always sending out applications for credit cards. They make it so easy to have lots of credit cards which can give people a sense of being able to spend more money than they might otherwise. I'm not saying credit cards are a bad thing they can be very useful but I think the banks make it all too easy for people to get in serious debt. Then you get all these pay day loan companies charging horrendous amounts of interest.

OP posts:
BoundandRebound · 01/06/2013 14:29

Yes I think you are unreasonable, its advertising not coercion with menaces

People should not view credit cards as free money but as very expensive money

StuffezLaYoni · 01/06/2013 14:30

I am in debt (about 5k) as a result of overdrafts, loans and credit cards. I do hate being sent all the invites for credit cards and loans. But nobody forced me to take them or be irresponsible with them.
As a result I will be juggling money and struggling for a few more years despite earning decent money.

It is crap that they keep sending you stuff though, especially the adverts for credit cards with obscene interest.

Kasterborous · 01/06/2013 14:32

No no one is being forced, but sometimes it must be tempting. I know I've thought about it in the past.

OP posts:
YoniBottsBumgina · 01/06/2013 14:33

They have all those friendly/jokey little adverts on the TV as well don't they, Wonga etc, making you feel like it's no big deal when actually it can turn into a massive one :(

StuffezLaYoni · 01/06/2013 14:34

It is tempting. When everyone else seems to have cash to flash about and you don't, it's far too tempting to whack it on a card or use your overdraft.

Really, really not a good idea though.

elQuintoConyo · 01/06/2013 14:41

My Dsis, two years older, had a switch card when they came out and she started work, I was still at school. She spent more than what she had in her account and got into some trouble. Scared the bejeesus out of me.
I have an on-going student loan that I've chosen to defer since 1997, the only debt I have, but that still worries me (even though I live in Spain and to earn anywhere near the £2,100 monthly income to pay it off is just hilarious! If I earnt that I'd be living the life of fricking Riley!).
DH has a cc that we got because we went to the States and neefed it to rent a car. It's a card with a small limit on it and you must pay it off in full at the end of the month - it means we use it only for important big things that we do have money for. If we ever use it, I can't remember the last time we did.
I've got tremendous will power and fear when it comes to cc and debt, but no willpower when it comes to chocolate and cakes, so I would't criticise someone who got into debt. It is freedom of choice.

Fakebook · 01/06/2013 14:41

Barclays and Amex are notorious for sending credit card invitations. I never open those letters and they go straight in the bin. We only spend money we have. If that means forgoing holidays or an expensive car then so be it. I don't understand how people are tempted by credit cards when they know they have no money to repay the cash.

Kasterborous · 01/06/2013 14:47

I wouldn't criticise any one who got into debt, like I said in the op it is made far too easy to do so. I would never borrow more than I could pay back, I would hate to be in debt. But I'm also been in the lucky position so far that I haven't had to, it might not be the case forever.

OP posts:
chocoluvva · 01/06/2013 14:51

Slightly off topic - sorry - but when I recently got a new current account and credit card with the same bank that I have my savings account in, the default credit limit on my card was £6300, but they wouldn't offer me an overdraft limit of £300 when I asked for it.

StuffezLaYoni · 01/06/2013 15:04

Doesn't surprise me at all. I wanted to borrow 3000 to clear the bulk of my debts and they declined, but then gave me a 1500 cc. Which I wish I'd never accepted.

HollyBerryBush · 01/06/2013 15:06

Payday loans are rightly getting a hammering lately.

Trading Standards investigating cases of loans given to minors, intoxicated people, unemployed with no income.

It's legalised loansharking, except you don't get your kneecaps broken.

Chunderella · 01/06/2013 15:06

This reply has been deleted

Message withdrawn at poster's request.

noisytoys · 01/06/2013 15:15

There can be good debt as well as bad debt. I'm in debt because the roof had several leaks and needed replacing and I didn't have a spare £7k lying around. The benefits of a dry house far outweigh the cost of the debt and we will enjoy the benefits long after the debt is paid off Smile

CouthyMow · 01/06/2013 15:16

YABU. I knew enough at 18 to block the overdraft on my bank account, have never had credit cards (even when I was able to work, and was earning £42k pa).

I was taught all the time I was growing up that if you don't have the cash to afford something, don't buy it. And I'm teaching my DC's the same.

My 11yo is sensible enough to realise that places like Wonga, with interest rates of over 4000%, is just a bloody stupid idea.

If you teach them about interest rates on loans and credit cards as soon as they have enough Maths skills to understand it, it becomes ingrained that using credit is a daft idea.

My 11yo DS1 can't see the sense in paying £££ back for £100. If you don't use credit, then when you buy something that costs £100, you are only paying £100. If you use credit, you are paying £100 PLUS whatever the interest rate is on that loan.

I don't think that debt because of credit is because of payday loan companies and banks 'pushing' loans, but because of parents not teaching their DC's about financial matters.

It helps as a parent to teach your DC's not to use credit if you don't use it yourself, mind you.

That's probably why it works for me, when it doesn't for others - if you use a credit card yourself, and your DC's see you using it, they are going to see it as hypocritical if you then tell them not to use credit...

Abra1d · 01/06/2013 15:17

I think it was obvious five or six years ago that many people were living way, way beyond their means. Spending money on a roof on credit obviously makes sense. Spending money you haven't got on handbags and expensive hen weeks makes little.

CouthyMow · 01/06/2013 15:19

Being 'not very bright at all' doesn't matter - even my DD with moderate LD's 'gets' that credit is a bad idea because you have to pay back MORE than you have spent, which would leave her with LESS money for shoes...

It is all about teaching children this.

Now personally I feel classes in budgeting, which should include lessons on compound interest, should be mandatory in schools - but as it isn't, I teach my DC's all about these things.

StuffezLaYoni · 01/06/2013 15:29

I do agree with you, Couthy, but for many people an existence of never being able to afford anything nice, having to live hand to mouth, always having to see their families go without - when there are adverts everywhere telling you how you NEED this item - brings you down.
It doesn't make getting into debt a sensible option, but I can see how it happens for some.

Kasterborous · 01/06/2013 15:31

My Dad taught me well about money and not getting into debt. When I was 14 I wanted a new bike for Christmas and my Dad said I had to save for half of it from my babysitting that I did occasionally. I duly did. Then my parents paid in full for the bike. But it taught me a good lesson that if you want something you have to earn it and be able to pay for it. The only credit card I 'own' is on DH's account, he is brave!

OP posts:
FobblyWoof · 01/06/2013 15:34

I definitely see where you're coming from OP. I'm a stay at home mum and I haven't had a regular income into my separate bank account for a number of years with the exception of CB. I know I'm pre-approved for a loan though! Wtf?!

On the flip side DP works in a bank and had a guy in last week wanting to take out a loan because he'd racked up huge debts with pay day loan companies. He only took out one pay day loan at first to afford to pay for a funeral but had to take out more to keep up. The poor guy got rejected for the bank loan despite earning enough to make the repayments (just not the repayments on the pay day loans). DP is trying to help but it's hard when his hands are tied.

I really do think that all it takes is one bad month for things to start spiralling. We all (well most of us) live a lot closer to the max end of our earnings now.

maddening · 01/06/2013 15:42

Why am I not sat here festooned in diamands without several time shares and surrounded by clothes, makeup and trinkets? They are also advertised but I haven't gone out buying it all. Yabu.

I can see how it happens but if you are in debt it is your own responsibility.

Stuffez - your post reminds me of the James song " sit down" with the line "if I hadn't seen such riches I could live with being poor" :)

maddening · 01/06/2013 15:44

Ps the pay day loans are a disgrace - and their adverts.

HollyBerryBush · 01/06/2013 15:45

Vanquis Bank weekly send my 17yo DS a credit card invitation and have done since he was 15

StuffezLaYoni · 01/06/2013 15:48

Thanks for ensuring I'll be singing that song all afternoon! Grin

HollyBerryBush · 01/06/2013 15:50

Well, it's all very well sitting judgement about how people are greedy and need things - but fobbly has given an example how things can escalate out of control with an foreseen circumstance.

A lot of these payday loans will be taken out to buy food, where benefits are being streamlined and people don't understand how to streamline their spending OR they are locked into contracts.

EG I am tied into my very cheap internet provider until January. If I choose to break that contract they will fine me £200. Suppose I had lost my job and cant afford the £9.95 per month to keep my BB going - how could I streamline to avoid a £200 fine?

People are losing jobs all over the country and caught in this spiral.

If they weren't, we wouldn't have food banks