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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:
TalkinPeace · 28/01/2018 11:36

I have mine to build my credit rating.
Credit ratings are an utter con.
Mortgage brokers no longer use them for example

LemonShark · 28/01/2018 11:37

NameChanger22 A credit rating is very important. You can't get a mortgage if yours is poor. You can't even rent a flat without a guarantor with a poor credit rating. You can't get anything on finance (I don't personally use finance for anything but for some people it might be a smart decision, for example if you need a computer to run your business, youre irreparably breaks and you can't afford a new one outright, it might make more sense to get one on finance). You can't open a normal bank account with really terrible credit rating, only a cash account, and some banks won't accept you for even that.

It's foolish to neglect your credit rating. I say this as someone who still has a poor on five years after bankruptcy, that I've been working on building ever since.

NameChanger22 · 28/01/2018 11:39

I agree that credit ratings are a complete con.

As for hotels - I've never come across one that doesn't accept a debit card.

As for insurance on goods - it's called a receipt.

Purplerain101 · 28/01/2018 11:39

How do you get a mortgage with a poor credit rating?

TalkinPeace · 28/01/2018 11:39

You can't get a mortgage if yours is poor.
Except that credit ratings are NOT what is included in the affordability criteria that they have to use now.

The credit rating companies are a con
they disagree with each other
and prey on the vulnerable to pay their fees

OuaisMaisBon · 28/01/2018 11:40

TalkinPeace - am clearly thick as have perused the spreadsheet you linked to and am still none the wiser as to what you mean by "The Standing Order Trick". Confused Is it setting up a monthly standing order of the minimum sum (or of a multiple thereof) necessary to pay off the current outstanding amount, having cut the credit card up? If it is, thank you so much, that is really handy to have when I am wrangling our accounts, as though I won't set up a standing order, I can at least keep control of what's going on and have an idea of where we stand Grin

LemonShark · 28/01/2018 11:40

Is that a universal thing talk? I've never known anyone get a mortgage without their credit rating being checked and deemed acceptable. I'm in the uk talking about the past few years.

You can't get a mobile phone contract with my and many providers without a decent credit rating either.

Maybe there's a move away from them (I haven't seen any evidence of that though) but the fact remains for many people it's crucial. When I rented my current apartment I failed the credit check and couldn't have moved forward with it without using a parent as a guarantor, who was also credit checked. Same for my last three rentals too.

brownelephant · 28/01/2018 11:41

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

  • earning cash back on certain purchases
  • bridging unexpected large outlays (broken boiler...) until payday/freeing up money from an isa
  • extra security for internet purchases
  • extra insurance for large purchases (holiday booking, white goods...)

pay it of in full each month and it's a good thing

Caprinihahahaha · 28/01/2018 11:42

OP

Did you have any sense of what the debt was?
Did you think he was paying most of the debt down monthly or were you comfortable with some debt , you are just shocked at the size

I think you should take this as an opportunity to reset your own views on your finances
Obviously it’s bad and upsetting that he didn’t tell you about the level of debt but you can’t have had any curiosity about it at all for it to get this bad
You knew that he ripped up statements but that was something you chose to ignore and you must have been shopping and never once said ‘how’s our balance? Can we afford to put this on the card or should we wait?’

You have been wilfully ignorant about this and it may be that you trusted him but you can’t ignore signs and chose not to ask and blame him entirely

It sounds like this is salvageable and it could be a good thing long term - for both of you
Good luck

LemonShark · 28/01/2018 11:42

"As for insurance on goods - it's called a receipt."

It provides back up for those instances where a company is not acting in line with the law and refuses your return or replacement, also if you buy something then the company goes bust before you receive the goods, you can get refunded by the bank. Not all companies act honourably, you know! It's good to have backup just in case.

TalkinPeace · 28/01/2018 11:43

OuaisMaisBon
The magic bit is to freeze your payment at what you paid this month
rather than let them reduce the direct debit a bit each month.
You only pay what you paid this month
but you keep paying it even as the debt falls
and thus the amount of capital you pay off each month escalates fast

A direct debit the bank control how much you pay
A Standing order you control

LemonShark · 28/01/2018 11:43

"The credit rating companies are a con
they disagree with each other
and prey on the vulnerable to pay their fees"

There are three main credit check agencies if I recall correctly. But you can use free ones that don't require a fee. I use Noddle, it's free. Was recommended by money saving expert and has been useful for me in monitoring monthly over the past couple of years as I've taken steps to improve my rating.

NameChanger22 · 28/01/2018 11:44

I don't need a mortgage and I don't need to rent - I saved up for my house and bought it. I don't like debt, I save. I don't spend money on things I don't need, I don't need most things. I don't earn much. Why would I ever need a credit rating?

Most people live completely beyond their means, if they saved most of what they earned they wouldn't need debt for anything. A mortgage is the only debt people should ever have, nobody needs a credit rating for that.

kalapattar · 28/01/2018 11:44

If you pay off more than the minimum repayment every month and DO NOT add to your debt, you will pay a card off quicker than paying the minimum repayment.

The trick is being able to pay off more than the minimum repayment and being able not to add to the debt.

Given the OP has only posted a few times, I am not sure of the ability to do this yet.

LemonShark · 28/01/2018 11:46

Here you go namechanger

www.moneysavingexpert.com/shopping/visa-mastercard-chargeback

A receipt isn't gonna be much use when the company goes into liquidation after you've ordered an expensive item but before it's been delivered.

RandomMess · 28/01/2018 11:46

I'm surprised that is appears quit a few people don't understand that the credit card companies want you in debt.

We always pay our balance in full and pretty much all purchases go through it (Tesco club card points used to be worth loads to us). We ended up with a credit card limit of £12k when DH was earning about £22k and I was at home with the DC...

With 0% interest deals that had a 0% transfer balance I transferred debt onto those and squirrelled the money away as an overpayment on my mortgage saving me 2.5% per annum!

Fortunately DH and I have similar attitudes to spending (careful but without being miserly) so it works for us.

kalapattar · 28/01/2018 11:47

but you keep paying it even as the debt falls

Great advice - provided you don't add to the debt with everyday spending.

I am not sure the OP will be able to do that - given that they seem to be using the credit card for everyday essential spending.

Maybe the OP will tell us?

LemonShark · 28/01/2018 11:48

Oh fair enough namechanger, if you don't need a good credit rating then you're right it's irrelevant to you.

But that doesn't change the fact it's important to many people. Not many people are able to live somewhere they don't need to rent or get a mortgage for for the years it takes to save up the money to buy a home outright.

You may not need to care about your credit rating but it doesn't follow that it's a 'con' for others.

Putyourdamnshoeson · 28/01/2018 11:49

namechanger you saved up for your house and bought It? Nice for you. I'm guessing that you're over 50. Am I right?
The average family house in my area costs £165k. The average family income in £24k.

kalapattar · 28/01/2018 11:49

I don't need a mortgage and I don't need to rent - I saved up for my house and bought it

That's nice - must take a long time to save up for a house - given they cost £100 - £200,000.

ShowMeTheElf · 28/01/2018 11:50

I'm going to say ignore my earlier advice (except the bit about being ruthlessly frugal for a year or two). TalkinPeace's spreadsheet/standing order idea is brilliant and simple and spreads the 'pain' evenly rather than taking the biggest hit right now.

There was a TV series some years ago about paying off your mortgage, where, based on the interest rates at the time, by paying double on your repayment mortgage every month you could pay it off in 6 years: but the challenge of the show was to pay it off in two. Most of them actually managed it. If paying off a debt is your main focus and you aren't in real hardship it's amazing how quickly you can turn things around.

Goodluck OP: if you can get things out in the open with your DH and work on this together it is completely doable.

LemonShark · 28/01/2018 11:51

"I'm surprised that is appears quit a few people don't understand that the credit card companies want you in debt."

Exactly. You have to be very savvy and clued up before taking out a CC to ensure you know you're using it in a way that benefits YOU not the CC company. And to not take your eye off the ball. Some people can manage a CC fine without it ever harming them in any way. The danger comes when someone thinks that they are that person but it turns out they're not (or life circumstances mean they have no choice but to start accruing debt)

LightastheBreeze · 28/01/2018 11:51

A credit card if you pay it off each month in full is not really debt though, it’s just a different way of paying, when I pay on my credit card I have the money in my bank anyway, I’m just milking a bit extra from the credit card company in the way of vouchers or cashback

I just got a new credit card to take abroad as you don’t pay charges for it where I would with my debit card, it also will give me £20 cashback. I will pay it all off when I get home so I have gained £20

Fairenuff · 28/01/2018 11:53

My CC was cancelled by them because I didn't use it. Just had it for emergencies. They phoned and said I had to use it or lose it. I lost it.

TalkinPeace · 28/01/2018 11:54

Lemonshark
There are three main credit check agencies if I recall correctly. But you can use free ones that don't require a fee. I use Noddle, it's free.
Which is fine so long as the lender wants to use the same one
and the rating the other one gives you is the same

but the companies use different random bits of information
not all of which is accurate
and come up with VERY different random numbers.

When I was in debt I got my files from each and they were a work of art
bore little relation to reality
or each other

Mortgages are now on the affordability criteria
Borrowing is heading the same way
Instant loans that use online ratings are generally dearer than proper ones

Debt is a bugger - my spreadsheet helps people get out of it.