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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Just opened our credit card statement

445 replies

Mooycow · 27/01/2018 23:48

And am so shocked , it’s over 25.000, ! My husband deals with all the bills ( I do everything else) ,he gets online billing and tears up the statement when it arrives , we have together spent the money ,it’s all way too easy ,obs, AIBU to be shocked that we owe that amount .

OP posts:
Charismam · 28/01/2018 10:56

in what world is owing 25k to a credit card company a stealth boast?

NiteFlights · 28/01/2018 10:58

Adding to the mortgage/remortgaging if you have a good chunk of equity is also a far better options than the credit card right now

Once again, no this is not a better option. We don't know the OP's full circumstances. Turning unsecured into secured debt should be a last resort. OP needs a budget. There may be many many things she can do to repay this debt without adding it to the mortgage.

I am really surprised that this seems to be many posters' best solution for this problem. Yes, it can work, but every other option, including cutting all expenses to the bone, should be looked at first.

TalkinPeace · 28/01/2018 11:03

@mooycow
Please ignore all the people telling you to take out loans and add the debt to your mortgage and stuff
The Standing Order Trick is all you need.
It will cost you nothing and will make the debt vanish in a couple of years
so long as you bring your spending back within your income

NewYearNiki · 28/01/2018 11:04

What is the standing order trick?

TalkinPeace · 28/01/2018 11:06

@NewYearNiki
Click onto the spreadsheet I linked at 10.51 (its safe I wrote it)
and you'll see Grin

kalapattar · 28/01/2018 11:07

If you can't afford the minimum repayments, interest will add up.

The credit card companies will notice and then you will get letters from them - especially if you underpay the minimum.

Then you'll get phone calls - and all that encompasses.

I had a lot of debt. I couldn't afford the minimum repayments. I did contact StepChange - and I now have a payment plan - based on affordable repayments. The companies sold my debt - and it's now interest free.

This has affected my credit rating - and fair enough. There has been a default - this is what happens in this situation.

However - I am keeping to the plan. I am not paying interest. The debt will be paid off.

NameChanger22 · 28/01/2018 11:08

I don't understand why people with good incomes have credit cards. I think some of those people are going to become unstuck if Brexit ends up being a disaster (highly likely)

kalapattar · 28/01/2018 11:08

The Standing Order Trick is all you need

IF you can afford the regular standing order.

ItsNachoCheese · 28/01/2018 11:11

25k?!?! Holy fuck Shock

Gabilan · 28/01/2018 11:12

OP I would seek advice from 2 or 3 experts on how to clear this debt. As you can see from responses here, people are quite split on the best approach.

Not everyone who is in debt is spendthrift or reckless. It's the Micawber principle "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery." You only have to be a very small bit over, and consistently over, for debt to spiral.

Now that can happen because someone buys a £1500 laptop for a nine year old. But it can also happen if you're made redundant, or split from a partner, or if life just repeatedly throws shit at you. Sure you can save and guard against a few things happening. But if it keeps happening year after year despite all your best efforts? Well actually you can end up in debt without going on holiday, or getting hair cuts, or buying bathroom tiles.

Make this debt your priority OP. Cut back where you can and get as much of it as possible on as low an interest rate as possible. And watch what your DH spends. Some people have a weird mental glitch and fall for the whole idea of "credit" meaning they have money to spend, rather than realising that "credit" is just debt.

TalkinPeace · 28/01/2018 11:13

kalapattar
Have you actually read what the OP has said - the card is being serviced
therefore the OP has no problem using the standing order trick.

namechanger
My credit card bill is several thousand pounds every month
because I get cash back for everything I put through it
but I clear it in full every month

ShastaTrinity · 28/01/2018 11:13

I don't understand why people with good incomes have credit cards.

first not everybody agrees on what a "good income" is. It's rare to find people with a lot of spending money left after paying for essentials.

It's also purely practical. I have credit cards, needed them to built my financial record and they are a lot more safe to use online than debit card. I get free travel insurance, points, cash back. I pay the full balance every single month.

MagicWillHappen · 28/01/2018 11:14

TalkinPeace that spreadsheet is fabulous.

We've got 3 cards that have had a bit of a battering during maternity leave that I want to clear ASAP and this is what I've been (unsuccessfully) looking for Flowers

TalkinPeace · 28/01/2018 11:16

magicwillhappen
HTH Smile

There are folks on the debt threads who have cleared £40k of debt in three years without it affecting their day to day life - just using that method.
I'm rather proud I worked it out a few years back Wink

wizzywig · 28/01/2018 11:17

Has it been spent on £10 steaks?

Blackteadrinker77 · 28/01/2018 11:17

I'd be ill, no way could I cope with this.

Do an SOA together pull your belts in and start paying it off.

You can not afford a holiday.

kalapattar · 28/01/2018 11:19

Have you actually read what the OP has said - the card is being serviced

If the OP is using her credit card to pay for non luxury items and then only paying a bit back - then I would question that.

If they stop spending on their credit card, then they will have to find the money to pay for their everyday items from their income. This will affect their ability to pay more than their debt using a standing order.

Of course, they could increase their standing order - but continue to buy things on their credit card. This means that interest will increase and their debt will take longer to pay off.

Fairenuff · 28/01/2018 11:22

Have you actually read what the OP has said - the card is being serviced
therefore the OP has no problem using the standing order trick

Provided there are no other credit cards. Because if he's using one to pay the other they might not actually have enough to meet the standing order.

IntelligentYetIndecisive · 28/01/2018 11:22

Lay off using the credit card.

Forget about a holiday this year.

Concentrate on getting this debt down.

Ask hubby (who's so good with money) to include you in money handling decisions.

Blackteadrinker77 · 28/01/2018 11:27

And stop being a financial passenger

TalkinPeace · 28/01/2018 11:27

kalapattar
Of course, they could increase their standing order - but continue to buy things on their credit card. This means that interest will increase and their debt will take longer to pay off.
I think you need to test some numbers in the spreadsheet
as your understanding of how compound interest does not match the numbers

StopTheRoundabout · 28/01/2018 11:30

Might have to forgo the Caribbean holiday again this year .
You've given yourself away. You should research Maui instead.

NameChanger22 · 28/01/2018 11:30

All the so called "freebies" that come with credit cards aren't really free for a lot of people. If you have a debt, they're not free, you're paying for them with huge interest rates. Credit is too tempting for a lot of people. It doesn't matter if you think you can pay it off every month, there will probably come a month when you can't and then you're on a slippery slope.

I don't have a credit card, I don't see the need for one. I don't need a credit rating - that's just a made up thing that's been invented lately to get more people hooked on credit. If I want something I save for it.

LemonShark · 28/01/2018 11:34

"I don't understand why people with good incomes have credit cards."

I have mine to build my credit rating. I use it for around £20-100 per month and pay it off in full each payday.

I also use it for big purchases as you have some additional protection legally when buying large goods on a CC if they end up fault or you've been sold something different to what you expected.

I also have it as some hotel booking sites only let you book to pay on the day with a CC.

There are lots of good reasons to run a credit card, if you can trust yourself to only use it wisely and pay it off in full each month. I essentially see mine as the same as my cash as I'd only use it if I had that money sat in my current account.

kalapattar · 28/01/2018 11:34

I think you need to test some numbers in the spreadsheet
as your understanding of how compound interest does not match the numbers

Bit patronising.

If someone is using adding to their debt by buying everyday items but still paying more of their debt using a standing order, then the debt will be paid off eventually. However their debt is going to build up as the EXTRA interest due to the debt that is being added on will build the debt up and may not be counter balanced by the standing order.

Of course, they could stop putting everyday items on their credit card. Great - they can then use a standing order and the debt will come down. Your spreadsheet shows that.

But if they stop putting everyday items on the credit cards - they still have to buy these items. This will affect their ability to pay a standing order so the debt will come down in a longer time.

I presume you would advise the OP to

a) Stop putting everyday items on a credit card
b) Look at everyday spending
c) Set up a standing order plan to repay more than the minimum repayment.

Which is good advice. But the ability to pay more than the minimum amount will be affected by (a)