AIBU to ask how much debt you are in?

[stingray586]

Having a conversation with DH about whether our debt is above average or not. Our household income is approx £40000. We do have a mortgage but don't want to focus on that more asking about credit cards and loans. We have a credit card with £3000 owed on it and pay £200 a month for our car. We hope to pay off the credit card within the next 12 months.
AIBU to ask how much debt you are in? And if you also don't mind saying what your household income is as well? As obviously being £3000 in debt when you earn £20000 is a lot different to someone who earns £100k.

Never had a credit card or other loan though. Never understood having a credit card. Just spirals into debt. I just have my debit card and savings.

Some advantages of using credit cards:

You get more protection of your money, as a previous poster has said.

You build up your credit rating.

With some cards, you can get cash back or vouchers. Our credit card gets us 1% of our spending back, in the form of hotel vouchers. Therefore we put as much of our spending as possible on it.

Credit cards are madness if you are spending money you don't have on them, but they can be great if used responsibly.

Mortgage £70,000, loan £15,000 (paying for kitchen and divorce). Will be debt free in 2 years and mortgage free in 8.

I make hundreds of pounds a year from credit cards, in cashback and by exploiting interest free offers.

I also got (more expensive) replacement flights paid for by my credit card company when Monarch went bust 2 days before our holiday.

It is very hard to hire a car without a credit card.

I've never been in debt or paid a penny in interest.

No, no point at all having one.

Also, using the right credit card is by far the cheapest way to get currency and spend abroad.

We get air miles when we use our credit card, we went on holiday with the miles this year, wouldn't have been able to afford to go otherwise. It only took a year or so to build up the points too and the flights would have been about 1500 pounds for all of us otherwise.

They're handy to have, but only if you use them to your advantage and pay off the debt in total each month, not to buy stuff you can't really afford.

What credit card do you have thisisthefirststep, if you don't mind me asking?

here We're not in the UK, so I guess it wouldn't be useful for you.

Ah that's a shame. It sounded like a good one.

Under 4k on a zero per cent card for my car - have enough in savings to pay this off but don't want to just yet.

Enormous mortgage but decent LTV.

Household income less than half what it used to be hence need not to use savings!

Household Income high
But we are a low spend house
No debt 2 cars only replaced when totally knackered one has been owned since 98 one is 10 years old.
Holidays sofas etc are saved for. Takes longer to get them but having been in a lot of debt 20 years ago I am v v warey now.

DP and I have a credit card because we travel abroad a fair bit/ buy things online and it’s a little safer. We also have to charge work expenses and it’s easier to keep track.

Right now we have about £1500 (more than normal as we just returned from holiday) on our CC but we clear it each month so never carry a balance.

I pay £95 a month on a V low APR car loan. We have a mortgage and student loan but other than that only phone contracts.

Combines annual income about £90k

Single parent £41k income. £5k debts, + mortgage and car on PCP over four years costing £270 per month but work pay a £530 car allowance. Need to get my £5k down though as it is stressful knowing it’s sitting there.

I'm surprised by the lack of debt..

DH and I earn around 70k between us, we have:
133k - mortgage
25k - cars
8k - CC (my bugbear)
DFS sofa - not sure how much, 2 years left
Dreams bed - agajn, not sure how much, 1 year left
(Both the above are 0% interest though)
Grandparent loan - no idea how much we owe but we make a payment every month
DH has a Next account, less than £500

All manageable with around £900 a month left over between us. That all changes in April though when DD needs to start nursery as I'll be going back to work.

I pay for as much as possible using our credit card. We use it like a debit card and pay everything off every month. We get amazon vouchers for using it. So come Christmas I have a stash of hundreds of pounds worth of vouchers which pays for the presents.

Income is 38k from one earner. We have a credit card which is interest free as we needed to borrow to do house renovations that's about 5k! Also have £160 per month car loan, can't wait until this is paid off.

No debt and never have. Husband on 21k and I'm at home with the kids till time. I'm careful with money.

SIngle person, aged 44, income £20k. Other than mortgage (which is £315 per month on a one-bedroom flat) I have no debts. Savings of £17k. Have never had a credit card, only loan I ever had was 0% interest free on a new car when I was 22.

@cloudtree - I’ve been thinking of starting something like that with a reward credit card - which card do you use?

Mines is an HSBC premier card

*Bottom line is you probably don't need half the stuff you have, so why overstretch.

I'm getting tired of this "must have" "look at us" culture in this country.*

That culture is how capitalism works though. If people just bought what they need, it'd collapse!

I must admit, I don't understand the obsession with "new". For around a year, we've been wanting to change our bedside cabinets. The only ones we found that were the right size and style were getting on for £200 apiece and we frankly didn't think they were worth it.

Last weekend I found a pair that were nicer and much better quality for £40 each in a charity shop, and they're now sitting proudly in our bedroom.

Even if I was mega-loaded, I wouldn't buy a new car. The thought of it losing around a third of its value as soon as I'd had it a few months makes no economic sense to me at all. And leasing deals are even worse: you pay all that money and don't even end up with a car, unless you hand over a payment at the end that is often equivalent to the amount it's depreciated while you've had it.

All this replacing goods that are perfectly serviceable isn't good for the environment, either, or for climate change.

Earn c. £170k between us.

About £2.5k on credit cards and another £12k in car/bank loans

Mortgage is big though - £270k and likely to go up to about £500k when (if) we manage to move to a bigger place. That scares me as we haven't always earned this well and I know how quickly things can change.

We do also have £30k in savings that are ringfenced in case of job losses, illness etc (in addition to employment protection insurance) so I hope we are relatively well protected even with taking on such a big mortgage

And leasing deals are even worse: you pay all that money and don't even end up with a car, unless you hand over a payment at the end that is often equivalent to the amount it's depreciated while you've had it.

I love my lease. Whether something makes ‘financial sense’ or not completely depends on what someone values and their circumstances, it’s not an absolute! It’s like people saying renting makes no financial sense, sure if you have the option to buy you might consider rent to be ‘money down the drain’ (hate that phrase, only ever spoken from a position of privilege) but for many people they’re more than happy knowing they’re exchanging money each month for a place to live, that’s the value for them not whether they get the money or an item back at the end.

Getting a lease car was one of the best decisions I’ve made financially, after a decade of owning cars I found that the kinds of cars I could afford to buy outright were unreliable, always breaking down, always needing repairs, I hate the feeling of something happening out of the blue to your car and suddenly having to lay out hundreds just to keep it going. With my lease I get a new reliable vehicle, insurance for both of us is included (up to five people can be insured on it), servicing, breakdown, repairs with a courtesy car etc all included. It’s brilliant. Comes out of my salary before I see it so I pay less tax and NI, and all I have to pay myself after the cost of the lease is petrol.

It’s worth every penny for the lack of stress and hassle of owning a cheap car, I can’t do my job without one and I was missing days at work unable to get there when the cars I wonder were breaking down.

I know another option would be to buy a decent car :P but my friends who pay thousands for cars still have problems and surprise issues costing a fortune. Just took out my second lease and can’t see myself going back to ownership. I of course have savings put aside so if I ever need to break the lease I can afford it and can afford a banger.

I’m not a car person really and have no issues driving a cardboard box on wheels but it is nice to be able to choose and customise a brand new car too.

I will add though, all of my cars I’ve ever owned I’ve bought cheaply (£600-1400) and driven them until they’ve permanently died. And cost a fortune in the meantime to keep them going. So I’m used to paying repair costs and not eventually ending up with a vehicle at the end. I’m more than happy to pay for a lease for three years and then reassess whether to get another lease, buy a car or whatever. I don’t see any benefit to owning a car unless it’s worth a fortune and you can sell to recoup some money but as I’m not fussed about what I drive I’d never sell a car anyway as I drive it until it’s totally dead and can’t be sold.

Also since January companies aren't allowed to charge any fees for paying by credit card. Even better.
Credit cards are really useful as long as you can pay it off in full each month.

No debt apart from the mortgage and in my overdraft most some of the time!

I think I'm fairly old fashioned in that if i can't afford something, I don't buy it. I'd only get into debt for absolute essentials. I wouldn't get into debt for a holiday, non essential home furnishings, clothes, jewellery, nights out etc. Sometimes I feel like an idiot for being like this as I live a frugal life compared to others I know...plus they look like they're doing brilliantly in life whereas I don't..however, they're the ones in tons of debt..