If you were in £10,000 worth of credit card debt and someone left you £1000

[OnePramAndHisSprog]

Would you use it all to pay off a bit of the debt?
There are so many bits and pieces that we need and we are unlikely to ever get a sum like this again... But it seems like such a joyless way to use the money. And only a drop in the ocean of what we owe.
On the other hand, we are never going to get out of debt unless we prioritise that above everything else. WWYD?

[jellybeans]

I wouldn't. I would use the cash if I wouldn't get the money again for something I needed. That's if I could afford the monthly payments though for the 10K.

[IAlwaysThought]

IfNotNowThenWhen I agree.

[IfNotNowThenWhen]

I think some people are inventing things.
"Allowing a debt to accumulate because you believe that you can just default on it or simply renegotiate it is a risky way to think."
"oh it's okay I'll never have to pay back the full amount?!"

I have not said this, nor do I think it. However, if the debt already exists, there are smarter ways to manage it, and eliminate it than sinking all your income into a debt that continues to grow.
I said IF default has happened, then of course you must negotiate the repayment.
I also said that trying to make a deal to stop the interest is very important. This is not irresponsible; quite the reverse.

Look, we little people sometimes don't realise that, as far as credit goes, we act like rubes. We don't have to. All debt can be bought and sold, and all debt is negotiable. This is how the world works for rich individuals, and business. We have more power than we think if we did but know it.

[IAlwaysThought]

Sock you don't have to be snarky.

[IneedAsockamnesty]

So be clearer when you post. Because that one came across as if you didnt know.

[IAlwaysThought]

Sock
Yup, I do. Credit card debt is not a 'priority' debt however paying it off or minimising should, in some circumstances, be a priority as it can be such a ridiculously expensive form of debt.

[IneedAsockamnesty]

Op,why bother stressing yourself out trying to do this yourself fretting over it and listening to conflicting advice from total strangers who you have no come back on.

One phone call to either CAB or CAP and they will do it all for you for free.

[IneedAsockamnesty]

IAlwaysThought.

You know what priority debt means don't you?

[GobbolinoCat]

Winter coats, TK MAx, CHARITY SHOPS, get a nice quality one for between £6 and £15 from a good make, why buy new poor quality? Ebay? Freecyle...I gave away some lovely coats for free hardly worn.

I agree with other posters, as long as you have plans in place to pay other large debt back, keep the grand as a pin money account.

But please do not waste it on new coats!

[Tikkamasala]

IfNotNOwThenWhen do you not think its quite irresponsible to be thinking oh it's okay I'll never have to pay back the full amount?! People need to take responsibility for themselves. I'm not having a go at people getting into debt through bad luck rather than bad planning, which can happen, and I don't think you need to flagellate yourselves or go without for ever more but I do think, whatever the reasons for the debt, its a bit off to be thinking don't worry, won't have to pay the full balance anyway.

If I was the OP I agree I would get cheap winter coat from primark or Tesco or whatever, as that is essential and I think it's awful to think of kids freezing and going without, then rest on the card and speak to someone for help with debt planning as soon as possible.

[ChristmasCareeristBitchNigel]

FFS, why is the OP getting crucified for getting in debt ? Especially when people are usually so quick to jump on posters considered "judgemental". The OP has clearly stated that her DH was unemployed for a year, running up £10k in a year on living expenses is very easy

OP, i would just pay it straight off the card. Resist the temptation to put it in your bank account because as soon as you start spending it, it will end up frittered away. And then you will be annoyed with yourself.

Just Do It. Quickly and then its done

[IAlwaysThought]

Obviously, if you ALREADY have an unmanageable credit card debt you SHOULD be doing everything you can renegotiate and minimise its costs.

[IAlwaysThought]

Credit card debt can most definitely be a priority debt - depending on the individual circumstances.

Allowing a debt to accumulate because you believe that you can just default on it or simply renegotiate it is a risky way to think.

[IfNotNowThenWhen]

What spiritedwolf said ^

Credit card debt is NOT priority debt, and even debt managment plans allow things like xmas/swimming/trips out in the budget.

What gets me is the attitude toward us ordinary folk regarding being in debt. We are supposed to flagellate ourselves and feel ashamed, and not buy our kids a measly xmas present until some Barclaycard has had their pound of flesh.
Meanwhile, banks buy and sell credit all the live long day, sometimes getting in a right pickle, and having to be bailed out by governments, but that's just business, right?

I know I have said it already on this thread, but trust me, it bears repeating: Anyone who is 10 k in debt with credit cards should be looking for ways to stop the interest, whether that is by negotiation or default.
Then and only then think about paying into it.
Secondly, if you do default, for the love of God, never think you have to pay back the full amount.

[Pearlsaplenty]

I would pay £950 on the credit card and then use the £50 to treat myself. Life is too short to have no treats and sometimes a special treat can give you extra motivation to budget wisely and save money.

[teacherandguideleader]

I have debt. If I got £1000 I would keep the money aside for the things I need, such as getting car serviced, sensible Christmas / birthday presents. But, my debt is in low interest loans and so paying it off early doesn't make it cheaper for me as I still have to pay all of the interest. I would feel differently if it was on credit cards accumulating interest.

[Spiritedwolf]

Wiggle room for both putting money aside for irregular essential expenses and for a little lesuire I mean.

[Spiritedwolf]

meant to say that while I could get away with my daft hair in my situation, other people are required to maintain certain levels of personal appearance in their jobs, this may or may not involve having a basic cut, perhaps by college students a few times a year.

You know, you can get away with being really close to the bone frugal for a while, maybe even quite a while. But then appliances break, a car that's required for work needs repairs to pass an MOT, your heating bill goes up, etc and your budget where every penny is accounted for is blown. You need some wiggle room.

[Spiritedwolf]

I'm not going to argue the toss with you about hair cuts, I have ridiculously long uncut hair. But my point is that even debt management folk and creditors realise that you need enough money to live on, not just survive on.

Credit cards and unsecured loans are not priority debts. There is no need for people to be living in dire poverty until they are paid off. It can be spread out over a slightly longer term (as long as the interest has been stopped - if their credit rating has already taken a hit through defaults - or via switching/tarting to keep interest low/zero if you still have access to credit). As long as the problem is being dealt with, i.e. the capital is being paid off as well as the interest, you can work towards a debt free date.

You may personally think that people should put their lives for however long it takes to be debt free, and maybe that is something you'd be prepared to do. But I don't think its realistic or fair to expect people with children to cancel christmas for example - which isn't the same as saying 'yes, go ahead and have a lavish christmas on credit'. It is only money after all, and in our monetary system, it never existed in the first place, no saver is having to wait 5 years rather than 4 years to withdraw their savings because you are paying it back to the bank over a longer time.

The important thing is to get free, expert advice (I keep mentioning CAB because they helped us, but I understand their funding has been cut and so they may not have the resources they used to) about the best way to manage your debts, with references to your aims (being debt free as quickly as possible perhaps, or maintaining as good as possible a credit history, or making sure that your budget isn't stretched so thin that you have to live on beans - whatever). Debt isn't bad. Bad debt is bad.

I say that as someone who lived very frugally before our debts were managed properly, and still frugally for most of the time we were repaying them back as quickly as was sensible and someone who is glad to be debt free. I am glad that we are past the times of debters prison and indentured labour and that people who have fallen on hard times are treated with more compassion - even if not everyone thinks its a good idea.

Before taking a moral view of people who end up in debt (and it isn't just a case of people being feckless), you might like to visit Positive Money to see their explanation of how the monetary system works.

[DeathByLaundry]

Of course they're not essential. But not everyone gets into debt because they've been living it up. Mine was accrued through having to pay professional fees and to run a car right through two maternity leave periods. So taking a sanctimonious view that it's right that those in debt should suffer and go without things others take forgranted seems overly harsh to me.

I agree strongly that you need something for discretionary spending. Treats like the weekly local paper, going to the council pool, a little fuel for leisure and the occasional bottle of wine are in our budget. It's unrealistic to expect anyone to go without any form of leisure or entertainment for five years. Anyone who says different clearly hasn't been there themselves.

[elskovs]

Erm,.. what exactly calls for sympathy? And who wants it??

So what you are saying is that you agree with me and you don't consider haircuts an essential??

[CurlyhairedAssassin]

Erm, I think that was the point that elskovs was trying to make? That you go without.

[DeathByLaundry]

elskovs I think that was an unsympathetic, sanctimonious and naive post. Every bloody day brings something new and challenging when you're bare bones broke. Today DS was told by his swimming teacher he needed to bring new goggles next week because he can't go under properly with his current leaky ones. I can't afford goggles until pay day. I had to tell him that, and he's resigned but disappointed because the rest of the class are having fun collecting sinkers. It's shitty to have to refuse your DC things all the time. It's very easy to wax lyrical about what you'd sacrifice but you're not in those shoes.

And I do cut my own hair FWIW.

[elskovs]

Haircuts ?? LOL

If I owed 10k Id cut my hair myself! Seriously, I don't know how anyone can justify going to the hairdressers when they are in so much debt.

Or buying present actually. Id cancel Christmas myself.

[Spiritedwolf]

It is very difficult to live with 'nothing but essentials' (especially if you aren't including warm winter clothing as essential!) for years and years. It's very stressful and demoralising. Of course people do it if they have to, and its better than running up more debt, but a sensible debt payment plan makes a reasonable allowance for some discretionary spending (hair cuts, christmas presents etc), nothing lavish but enough to allow a reasonable standard of living.