Over £40k credit card debt

[Debtfree212]

Name changed.

Struggling to get my head around this and need some responses. My best friend has disclosed that she and her husband have £40k of credit card debt. This is on top of a mortgage, their student loans, each has an over drafts and they have monthly car finance. Speaking to her in detail (as we went through it together, more because I was in disbelief at the numbers) and it’s roughly:

lloyds card 1 - £5.5k
barclays card - £8.5k
amex - £18k
Lloyds card 2 - £4k
Mastercard - £2k

They are both high earners (I don’t know what that means in terms of exact salary) so they have at the start of this year decided they need to sort it and are putting down more than £1.5k a month onto these cards, they’ve been doing this since January.

I have no awareness of credit card debt as I have not had one (never liked the feeling of it) but is this level of credit card debt normal? It feels massive to me. How on earth have they been able to get 5 credit cards between them? Honestly shocked they are not stupid people / not extravagant I just couldn’t believe the figures - need to know if this feels excessive to other people?

she seemed very blasé about it but said they had quite a serious moment January where they knew they needed to knuckle down and sort it out, so they have blocked the cards / aren’t spending on them.

do I need to check in to see / suggest she get some extra help? So surprised I would never have thought they had this hanging over them to know them, but maybe other people have multiple credit cards and pay them off monthly?

she said it’s been about 5 years of holidays / Mat leave spending / furnishing house

I'm not sure why you're so invested. It's a lot of money, but they have a plan to pay it back and earn a lot so I guess it's okay.

If it was my debt I'd be in a right tizz though.

It is high but what is actually interesting is how much interest they will pay over the time it takes to pay it all back.

Holy trinity, i can understand if they can cover the costs, but why rack up that amount ?

Because they are not perfect and sensible like you.

Don't you think you should mind your own business OP? What's it got to do with you anyway? Pretty nasty to start a thread like this under such a smug username about someone you claim is your best friend.

BTW that breakdown of cards and amounts is potentially very outing if your friend happens to be on MN too.

So weird that people rush on to tell the OP to mind her own business completely without irony.

As long as you meet the monthly payments having debt on cards will likely work in your favour when it comes to getting more debt on cards. It's surprising how much money some companies are willing to lend.

At the start of last year I probably had around £9k across five cards and I was having to turn down limit increases as I didn't want the opportunity to get further into debt.

I tend to move the debt around the same cards to make the most of 0% interest offers. It still costs but nowhere near as much as if I had to pay 20% or 30% interest.

I regret getting into so much debt but given what I'm repaying now I hope I'll be out of it in a couple of years. It sounds like your friends are in a similar situation where they just have to keep making regular payments and keeping an eye on it.

It seems like a lot to me but then I'm p/t low earner. As pp said its relative.

It's a lot, average household credit card debt is about 2.5k. They're obviously way higher. But they have a plan for paying it off and it sounds manageable.

I wouldn't offer any advice unless she asks for it or it becomes clear their plan isn't working. You don't have any experience or expertise and that sort of unsolicited advice is rarely appreciated even if it's good.

I can see how, for high earners or people who expect to be progressing quickly in their careers, if they haven't saved before having kids they might see credit cards as a way to smooth over the high costs of the early years. Not the wisest financial choice, but providing they aren't unlucky, not disastrous if they knuckle down and pay it back before the interest starts to take over.

That kind of debt will be costing about a grand a month just to service, so if possible, they need to be paying it off at maybe 2K a month if possible.

i ment it as a serious question but apologies i realised how it sounded

We're you taking notes during that conversation? Really it has nothing to do with you. Just leave them to it, it sounds like they are aware they need to sort it out and are doing so.

I wonder if this is actually a reverse, and its v rare I say that.

To have this level of knowledge of the debt and to know how much is being thrown at it, I wonder if the OP told her friend about the debt and is surprised by her friend's shock at the level of it so is trying to get an idea of what is considered normal.

Is this "your friend", OP or you? Because if it's your friend, it's weird as shit that a) they gave you this much detail and b) you then came on here and posted it!

It's very high, and I don't think this level of debt is normal but it sounds like they have recognised that it was spiraling and knuckled down to start to repay it. It will probably mean no holiday for a couple of years. I don't think it's for you to do anything. Are they aware you have put all their debt on a website?

The debt is only significant as a percentage of their income. For instance, it would be peanuts for Musk. So you can't really know anything unless you learn more about their numbers. It often happens that the more debt you have, the more credit you're allowed.
Of course, you could casually say, That seems like a lot to me - does it worry you? And then you could see what she says.

Nasty? She's worried about a friend!

It's a colossal amount of debt, yes.

Lots of people will tell you otherwise, because having huge credit card debt has been normalised.

I'm 40 and have never had a credit card. My motto has always been 'if I can't afford to pay cash, I can't afford it'.

It’s a lot, yes.

I hope you’ve changed some of the details to make this less recognisable.

The 18k on Amex stands out as a worry to me- the charges on Amex are generally very high if you don’t pay off quickly. To create a plan they need to consider the interest rates on each and whether they have the option to consolidate to lower interest rate but still unsecured credit.

whether the amount as a whole is a worry depends on their wider financial picture. Especially income. Without that it’s impossible to say.

It’s a lot of debt but they have a plan to pay it off and are doing so. It’s also good that things out in the open (to each other)- real problems happen when one partner tried to hide debt.

So no need for you to do anything other than be mindful of the fact your friend might have less disposable cash for a bit.

Paying £1500 a month will be barely scratching the surface of the balance if they're on the standard APR - assuming no 0% cards in there?

I can't imagine being that much in debt on credit cards - they must be making MASSIVE changes to their spending habits if they're a) paying off £1500 a month and b) not accruing any more debt.

Sounds like insanity to me. I've never taken on any kind on debt and wouldn't dream of buying non essential things I can't afford using a credit card.

I'm on disability benefits and have been approved over the past 11 years for 5 credit cards. 6 if my Argos card counts but you can only use that in argos or sainsburys.They care about your credit score, your repayment history, and your disposable income after all bills paid. Combined across the cards i have a credit limit of just over 15k, which is actually higher then the total ammount i get a year from PIP and ESA.
My score is good or excellent depending who you use (experian, clear score etc) I've never missed a single payment, and 3 cards are now dormant and paid off, though one is my original card with my highest limit that i dont want to lose so i buy one thing on it per month and pay off in full. The two cards with balances are on 0% deals and if i stick to budget will be fully paid off before those deals run out, and if they arent i get 0% balance transfer offers from my OG card multiple times a year. I was just offered raising the limit from 5000 to 8000 but they then upon application decided not to increase it. The only reason i did the application is because the higher your limit the bigger safety net if something massive happens, plus it then reduces the total % of your credit limit you're utilising and keeping it low means better credit score.

Credit cards are a big positive as long as you use them responsibly. I try to keep 1k in savings incase they suddenly decide to close the card so i can always afford to pay off any card all at once.

Sounds like your friend was just not very responsible with her cards initially but is working on that now.

I actually feel the same, but nonetheless have a credit card for the protection. Easy enough to quickly pay it all off with your cash.