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

It is a lot, much more than I would be comfortable with but although I have a credit card I pay it off in full every month as I don't want to pay interest.
But if she can manege it I don't understand why you are worried about it or why her level of debt is anyone's business but her's and her partner's.

Debtfree212

Wow. What a smug username and name change. Also, as others have said, it's absolutely none of your business.

need to know if this feels excessive to other people?

What the hell has it got to do with you?! Why do you "need" to know?! 😂

You say should you check in to see if she needs help?? Well yes, if you're genuinely concerned and can actually help her. But I feel you're actually just sticking your nose in and judging her life choices in which case, no.

And FWIW I have had more than 5 credit cards before solely in my name (I used them to transfer balances around to keep them at 0%) so no, it's not odd that they have 5 between them.

Unless she is crying in your face asking you for advice it’s not really any of your business is it?

Yeah I wondered this too. The finances of someone else are nothing to do with anyone else. I mean, unless the person in question has specifically asked the OP to post all her personal financial information on Mumsnet, it is unreasonable to post threads like this. (And no WAY has the woman in question asked the OP to do this.) Unless...... it's as I suspect, the woman in question is the OP.

All of this. Daft username... and obnoxious sticky-beaky posts from the OP.

To be fair it’s not as difficult as you might think. I had debts on credit cards over 10 years ago that spiralled to £17,500. Only around half of that was money I actually saw. The rest was all interest, charges, fees and fines slapped on top. The good thing was the creditors all agreed to accept full and final settlements of far less than I owed. After paying instalments for ten years it only got down to around £12,500 and they accepted half that amount to clear it in the end. So although £40k might seem a lot, most of that might not have been money they actually saw and they may well not have to repay that amount in full and final settlement.

I wouldn't do anything OP. It sounds as if they're in a position to get a hold of it. They'll just have to sack off the holidays for a bit from the sounds of it.

Well generally people don't get heavily involved in their friend's finances, especially when said friend hasn't asked them for advice.

And people asking about their own finances do that on MSE, not mumsnet AIBU.

Oh no - not the ultimate Mumsnet damnation - 'weird'! How will we ever hold our heads up again knowing that some random stranger might think us weird? 🙄

The thread has been posted publicly and people are giving their opinions.That's the nature of a discussion forum. Not the same thing at all as whether OP should be publicly judging her friend's finances and trying to get others to join her.

You could be right, but she doesn't sound worried to me, she sounds judgemental. And the username she's chosen doesn't exactly scream 'worried' either.

PS confused what mumsnet would be for without posting this type of thing sparing personal outing details?!

Erm... discussing things without potentially identifying detail, maybe?

It is SO easy to spend high and quickly when doing house renovations / buying furniture etc. It might have been a better idea adding to the mortgage rather than putting on a credit card for some of it for a lower interest rate. Holidays are a luxury but again, it’s not difficult to spend 5k plus on a holiday. We have a big mortgage which would probably scare some people but no credit card debt. Others might have a very small mortgage but more on credit cards, it’s so hard to save up at amount of cash you need even for house improvements basics like a sofa, new flooring etc

Often people get the loan and continue putting purchases on their credit cards

Consolidating debt is often NOT recommended as overspenders tend to still use the credit cards and simply build up more debt.

If you do want to give some advice to your friend tell her to go to the Money saving Expert (Martin Lewis) website. Loads of advice there on ways to reducing interest payments and paying off debt. The Debt Free Wannabe forum has lots of poster in her situation and is very supportive if she wants to set up her own post.

Over to Debt free wannabee on money saving expert they need to go
They need to snowball by paying the highest rate first and cutting any unnecessary expenditure.
They'll find the best advice there.

Do not consolidate, their bad habits won't change and they all be back wherever started in no time, probably far worse a position

And NEVER change unsecured det into secured debt

£40k credit card debt is a lot if you earn £10k pa but not so much if you earn £1,000,000 pa.

other factors that are relevant include why they have that debt. I have a former colleague whose earnings are largely paid at the end of the year. He puts everything on a card and pays it off. Works for his family. It’s not a matter of morality but what each individual can manage in terms of stress, payments and any family tension caused. Sounds like they’d reached their limit on one or more of those, realised it and started reining it in. 🤷‍♀️ Not really your business unless she raises it again

I doubt they’re earning anything approaching £1m.
If they’ve racked up £40k on credit cards, it’s fairly safe to assume they don’t have savings, so if they’re genuinely high earners and don’t (as op says) lead an extravagant lifestyle, they don’t sound too clever.

But you simply don’t know is the point. So why judge based on your assumptions? If it’s between them it’s only £20k each. Being excessively in debt might be stupid - it might of course be the best of bad options - but it’s rarely a moral failing. Get over yourself

I can't believe you're sharing someone's debt breakdown by card !!!

In fact I really can't believe it

Its you isn't it?

FWIW, racking up your highest debt on an AMEX of all things is so financially illiterate I dont know where to start - that's at least £300 per month interest accruing and I'm erring on the side of caution.

I'd convert that to a loan sharpish if at all possible

Very easy to be approved for that level of credit, especially if they are “high earners” with reasonable credit history.

I have to actively cancel cards because mine gets unwieldy! I utilise interest free cards for their free period, pay them off and never use them again. I currently have £25k available credit across my cards (not in use, but theoretically I could go and use it right now), and I’ve had more than that available previously. I had around £40k available to me a few years ago and that’s just for me, not across two people. I have a reasonable income but not loads.

I don’t think it’s a responsible way to spend, but that’s their choice I guess. They seem to be managing the payments.

I would get a loan and consolidate the debt.

I’ve not increased my credit limit in years. I had to stop the card companies from doing it. I could wrack up this kind of debt across 3 cards tomorrow if I wanted and stay within my limits. And the earnings this was assessed against at the time, weren’t huge.
Of course, I don’t. Because that’s absolutely wild if you have no plan to repay it.
I think a lot of people favour the Champagne lifestyle on the beer budget.

Agree fools but it's their problem.

What? 😂
I haven’t suggested it’s a moral failing, or anything of the sort.
Have I touched a nerve, by any chance?

What if you couldn't get approved for a loan because the debt had f'd up your credit rating?