Is debt considered normal these days?

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Just that, really.

We have a car on finance (good deal) and mortgage but otherwise refuse to buy anything on credit - no pay later, overdrafts, credit cards etc. As soon as the car is paid I wouldn’t get another on finance either (husbands idea to do it and I don’t want to again!).

If we want something like a holiday, new furniture whatever we save for it.

A good friend of mine recently shared with me that her and her husband have just under £30k on credit cards, plus a holiday for £4K that needs paying before the summer. Plus car plus mortgage.

She said this without a care in the world - as though it was normal and she’d pay it off later.

They’re good earners so I think they must be living hugely out of their means but she seemed shocked that I was shocked by it?! I hate the car finance as it is and think I would feel incredibly stressed with that credit card debt sitting over me?

I know there’s an element of keeping up with the Joneses etc but I was so surprised (she spends a lot, regularly posts her days out etc on social media).

Different priorities I suppose, if you're lucky enough to have the choice in the first place. I would take the family holiday over the new kitchen. On my deathbed I will not be thinking about cupboards.😂 I'd sooner replace the doors, paint etc.

Depends how you use debt as to whether it's sensible or not.

There are 0% finance deals available for many things - so if you have the money, it makes way more sense to have it sitting in a high interest account earning for you, and paying off the 0% as slowly as possible (staying within the 0% terms).

Same with credit cards - as long as you pay in full each month, they offer better consumer protection, so I buy everything through them, but have no "debt", as it's cleared every month.

But in general I agree it's better to have the money you're spending available, even if you choose not to actually pay in full at that moment. I wouldn't like having even 0% deals if I had any doubts at all about my ability to pay them off within the agreed term.

We live in a heavily marketed reality and debt is intensely marketed, which I believe has normalized it.

I was ordering a meal on Deliveroo a few weeks ago and they had an option to pay over time!!! Insane!

I had consumer debt in my twenties, worked hard to pay it off and never again. It was a hard won lesson. We only have a mortgage and working to get that paid off ahead of time.

I have gone through crazy job turmoil, the market and the world are going nuts. No consumer debt and keeping an emergency fund is a great boon to my mental health. I want is to be able to stand on our own feet no matter what comes our way.

Edited to add that I do have a credit card for convenience, but pay it off every month and don’t carry a balance. Thought omitting that could be inadvertently misleading.

I was ordering a meal on Deliveroo a few weeks ago and they had an option to pay over time!!! Insane!

Even my live and let live thinks these are step too far really

No debt here.

It's when they're offering you a loan for the electric to heat the freezing cold stuff up when it's delivered that you know you're in trouble.

I had terrible debt in my 20s and after I cleared that I have had nothing except the mortgage for many years. My mortgage broker said paying the mortgage was quite sufficient to keep my credit rating OK and there was need to take out a credit card again.

Maybe you are right, these couples don’t tend to have savings either. It’s just a very different way of living and I couldn’t be so laidback about it. The thought of having almost my entire pay check leaving every month and never saving anything makes me feel ill! Especially when these are now low income families, they are earning £150k+ and that gets spent in its entirety.

Agree on both points 😀.

A lot of people use debt responsibly. Nothing immoral about it, we all run our households as we see fit. But it can leave you vulnerable to an unexpected hit and I learned the hard way that it is not for me.

Some of the pay over time options, however, I do object to. As I see them as designed to take advantage of vulnerable individuals or someone who is struggling to manage their finances. Take away on credit? Give me a break…

And I remember being in tears because my landlord put the rent up £25 a month.

Thanks, @latetothefisting - I don’t have a mortgage now as we were able to pay it off after 35 years, and do have some savings, but some of the savings are not instant access, so if the s* was to hit the fan, I could use my credit to solve a short-term issue.
I was advised by a FA friend to get my DC to take out credit cards and pay for their monthly rail cards with them, paying them off monthly, in order to get a decent credit rating, in case they ever needed to gain access to credit quickly if an emergency arose. I’m glad I didn’t give them entirely wrong advice!

Lots of people seem to have car finance. Whenever I’ve looked at it, it’s seemed quite a lot more expensive than just buying the car. It’s possible I am missing a trick but it doesn’t seem great to me.

Yes, they'll be in a vicious cycle I'd imagine. Unless they get a windfall/gift/even higher wage (which sounds unlikely, given their astronomical one now), it won't change. The only things I'd imagine they can do, is make further cuts on their lifestyle if there's any left to make, or consolidate their debt (if they haven't already). Downgrading their property even, may not be an option based on the market. It isn't a good place to be at all.

I guess the trick you’re missing is that lots of people don’t have the money available to just buy a car outright. Finance spreads the cost.
I lease my car, mainly because I have no interest in car ownership and don’t want to be responsible for maintenance and repairs. If something goes wrong, they come and collect the car, fix it and drop it back.

I don’t have debt now but I got into a lot in my early twenties through sheer stupidity! Then again later on through ill health. I’ve learnt my lesson now 🤦‍♀️

“Paying money to the banks for nothing - they take us all as fools for sure”

Er, it’s not for nothing - it’s for taking the risk of lending you hundreds of thousands of £, over a period of more than a couple of decades, usually.

I think as pp said it depends if it’s manageable based on their income/outgoings/dependents etc and if it’s 0% or low interest.

There’s a huge difference between more manageable low interest debt thats been paid off steadily and someone struggling to pay minimum repayments on their high interest loan/credit card.

Ideally people wouldn’t have to use them as much but we are in a tight squeeze nowadays, many people are being asked to do more for less , wages have stagnated, the cost of everything else has gone up! It’s understandable that people will say, to heck with it - life is too short, we work hard and deserve a holiday. Let’s stick it on a 0% interest card or take a low interest loan out and pay it back over 18 months or whatever.

Of course there’s limits to that and it shouldn’t be taken too far, but in moderation I feel it’s understandable and fine.

Not for me. I only buy things that are absolutely essential or things that are planned and budgeted.

I have a mortgage and I have a credit card that I clear every month, and is used mainly to buy things for ds, which I then claim back 50% from ex.

Working in an industry where redundancy can come with no warning, It's the only reasonable way to live.

I had credit cards when I was younger but I am no good with them! Cannot control them. I do not allow myself these days.

Hmmmmm their ‘risk’ is very low.. that’s why they make it a solid process to get a mortgage (same with other loans people get), and if you default they repossess and sell the house ..

There’s a huge difference between debt and credit. I utilise my available credit but I don’t borrow beyond my means to pay.

I have about £16k on credit cards at the moment (0%) but also have far more than that in cash so if needed I could clear the credit immediately.

Credit is only a problem if you can’t repay it.

Even billionaires use credit, that’s often how they became rich. They just usually have bigger risk appetite’s than your average person.

I’m quite risk adverse but clever use of credit got me 2 houses when most people my age were still renting and are now priced out.

Even billionaires use credit, that’s often how they became rich. They just usually have bigger risk appetite’s than your average person.

Of course. But they don’t live on the same planet as mere mortals. Billionaires use of credit is a money making game not borne of need. The majority of people use credit because they need it.

Truth is, debt’s just become part of how a lot of people manage their lives now. It's not about carelessness it’s just different priorities. Some people are comfortable carrying debt because they back themselves to cover it later; others would rather keep the pressure low and the balance sheet clean. Neither way is wrong it’s just about risk tolerance. You’re wired one way, they’re wired another. Don't be shocked by it just know what lane you want to drive in.

Yes most people I know have a lot of debt. Some from luxuries like holidays etc but most just for getting by, wages aren’t enough.

For me debt is strategic. I want a record of some debt to have a good credit rating so that I can get offered the best possible rates.

in addition to a mortgage we have 2 credit cards. Both at 0% and both with less than £1,500 on them.

That’s all the debt we have. We use the credit cards for protection and to spread out cost of bigger items (we have had really shitty luck with appliances in the last 18 months and have had to replace washing machine, dishwasher and vacuum cleaner as all old and no longer affordable to repair).

we have savings of more than the debt so could clear instantly if we had to.

debt can be an asset if managed well. I’m pretty sure the uber wealthy use debt to build their wealth!