Debt

twinnytwin

My DH is marvellous at managing our money - moving bank accounts, credit cards and savings around to get the best deal. A few years ago we paid a huge deposit on a new car by American Express which was giving a fantastic 0% deal when taking out a new credit card, and recently we had an expensive holiday and are paying it back over 2 years at 0% interest. We have got the money in savings to pay it all, but better in our accounts earning interest (however meagre) than in others pockets!

We do the same. We paid our home quite quickly (before age 40). Accept good credit card deals, paying before interest begins.

The one thing I can think of re attitudes to mortgages differing might be because of the changes imposed to help with mortgages if one becomes unemployed.

As far as I recollect back in more Normal Times (ie the early 1980s) I wasnt that concerned about my mortgage (though I wanted it gone) because, if I became unemployed, then the DWP would be due to pay the interest part of those payments from a few weeks in, however much they were and however long I had a mortgage for.

But then they cut it and, as far as I recollect, people are now made to wait months before they get any help/there's a limit to how much help they can get - and they're told it's a loan!!!!! and they will be expected to pay it back (errrr....just how if they've just been unemployed for months?). I'd have been terrified if that had been how things were when I first took on a mortgage - scared stiff in case no-one (either employer or DWP) was basically covering my mortgage really and very scared they'd cause me to lose my house.

So maybe that's at any rate part of the reason some people are now regarding a mortgage as "debt" - because of the sheer panic as to how it would be covered if they were made unemployed? No-one should have to feel terrified about a risk of losing a roof over their head if they become unemployed due to no fault of their own.

I would say the vast majority of those with a mortgage have every intention of repaying what they can of the capital as soon as they see a reasonable chance to do so after all.

My DH is marvellous at managing our money - moving bank accounts, credit cards and savings around to get the best deal. A few years ago we paid a huge deposit on a new car by American Express which was giving a fantastic 0% deal when taking out a new credit card, and recently we had an expensive holiday and are paying it back over 2 years at 0% interest. We have got the money in savings to pay it all, but better in our accounts earning interest (however meagre) than in others pockets!

At the moment mortgage interest rates are around 4.5% and fixed rate deals are available.
Rates of interest on credit cards are around 20%

Long-term loans are different from short-term loans but all are debt.

Juicylucy

Biggest debt of all is a loan to buy a house but people don’t seem to get concerned about that or class is as debt. But it most definitely is.

I never met anyone who wasn't concerned about their mortgage or class it as a debt .

Have you actually had a mortgage?

A mortgage is a long-term loan at a lower rate of interest than that on credit cards.
It might be a loan but is a different concept.

Eg at 4% a £250,000 mortgage would cost about £400,000 over 25 years, relatively cheap compared to the 15% we paid years ago.

I think the difference here is the type of debt.
We plan for mortgages and probably car buying.
We decide how much we can afford out of income.
With a car etc it is a fixed rate for a limited time.
I admit mortgages are different as the rates go up and down but we plan for those outgoings.
Credit card debt is when someone decides they must have something, clothes ,holidays and they really cannot afford them so they go into debt not realising that that debt is compounded monthly until it is unsustainable.
Thereby lies misery.

Juicylucy

Biggest debt of all is a loan to buy a house but people don’t seem to get concerned about that or class is as debt. But it most definitely is.

A mortgage is a debt. People tend to pay mortgages early, there's nothing to talk about. Car loans, if people so choose, are similar.

Juicylucy

Biggest debt of all is a loan to buy a house but people don’t seem to get concerned about that or class is as debt. But it most definitely is.

I never saw that as a debt either when I had one - nope....I saw it as equating to rent...but I would get to own the house once I'd finished paying it off (which was something I always intended to do early if I could from Day 1).

I see it as there's;

1. debt (by which I mean consumer spending in the main). So that's what you owe on credit card, overdraft, loans, borrowing personally from people and may be incurred from spending or from paying bills (when there wasnt enough income to do so).

2. mortgage (which you're paying instead of rent - as you managed to get a deposit together...but as per most people you didn't have enough money to buy a house outright).

3. student loans (which I see as nothing to do with the person themselves - it's just that what should be university grants got turned into loans instead - and that's down to the government and not the person themselves so to say).

I divide bills the same way:
a. Bills (ie my fuel/water/Council tax/communications)
and
b. NHS bills (which I regard as money I'm being made to spend to "subsidise the NHS on my own behalf" because it barely functions these days. I really really begrudge money getting taken for "NHS bills" - it goes "Earwax removal - used to be NHS/still should be", "Blemish removal - used to be NHS etc" and so it goes on. I don't regard myself as getting anything at all for "NHS bills" - just the healthcare we should all have okay anyway. The budget list for each month is divided between "bills - £x" and "NHS bills - anything they make me pay for that month, eg "Dentist check-up/hygienist - upward of £100 minimum".

Personally I make sure I steer well clear of debt (either my own or NHS debt) these days. But - yep...it's in two columns - 1. my costs 2. their costs they are making me pay.

I'd have expected sympathy for sure if I couldnt pay my mortgage back along - and for people to treat any debts I had as "my doing". There is no realistic alternative to having a house/flat to live in and, imo, you've "done your bit" if you've got a manageable at the time mortgage in the first place. My "to do when I can" list always went 1. Necessary living expenses. 2. Bills 3. Mortgage 4. NHS bills 5. Wow - some money for me to actually spend at last and about time too....

I do think managed sensibly credit cards are a good asset. I have a Sainsbury's credit card, I got signed up for that in the store itself, I only use it for grocery and household shopping nothing else, and my payment in full is collected by dd. Other than that I have an M&S card for fripperies. A Barclaycard I don't use very often and of course my debit card. I always pay off what I owe every month, I became sensible in my mid twenties apropos of getting in debt I've never done it since. I do think we need credit cards for certain situations they're very much a factor of modern day life, it depends on how we use them, I agree it can prove ruinous the roll up of interest that can accrue is shocking especially for those that juggle with several and pay of the minimum amount every month.

Plans to scrap the credit card cap of £100 for smaller, everyday purchases will just prove too fatal.

I remember buying a suite and bed on hire purchase, 1969.

We did buy second-hand dining table and chairs from a neighbour of my DB. We had it for over 20 years and it moved house with us twice.

JennyCee
You claim that nobody NEEDS one.
What would you do if you got married, moved into a semi furnished flat and then were able to get a mortgage to buy your first house ( 1971)
Where would your furniture come from. Remember this is 1971, no wonderful second hand shops around to buy cheaper furniture.
We were fortunate that we both had secure trades ( printing).

Juicylucy

Biggest debt of all is a loan to buy a house but people don’t seem to get concerned about that or class is as debt. But it most definitely is.

I think most people do see a mortgage as a debt. Why do people talk so much about how much is left to pay off, or make ectra effrts to may more than reuired off so that they can get their mortgage paid off early. It is just that the language is different, but the debt is the same. many people never default on the mortgage, no matter how much they are pressed to pay other debt.

The difference is, it is a secured debt, which mean the lender can insist the house is sold to repay the outstanding debt, which, all being well will mean that debt disappears, although the dispossessed still have to find housing and pay for it. Car loans work on a similar principle.

Unsecured debt, stays with people until they finally pay it off or go bankrupt - which brings a whole new set of problems with it.

Biggest debt of all is a loan to buy a house but people don’t seem to get concerned about that or class is as debt. But it most definitely is.

We use a John Lewis credit card for just about everything and pay it off monthly. The benefits are the protection, plus the accumulation of JohnLewis vouchers over the year which always come in handy at Christmas.

Using a card also gives you a credit history, defo needed in these modern times if you ever wish to buy , say, a house

M0nica

JennyCee

I haven’t had a CC in years due to ex hubby overspending - and how!!! He had been sent about 12 CCs. He eventually sorted it out and like me will not entertain one now. It was the fault of the banks and financial companies who gave them to him to pay the off all the previous debts, and so it went on.
No one NEEDS one.

But you do NEED a credit card, in order to get a credit record should you want a mortgage or a car loan.

I quite agree that for some people they are best never owned, but a good 90% of us, I should think, have had credit cards for years without them ever being a temptation to overspend.

Hard cases make bad law and bad rules for how other people can live. I have had a credit card since they were first issued. My first credit limit was £36. I have never in over 60 years, reached my credit limit or been unable to make a monthly payment, and that applies to most people.

You also need a Credit Card to hire a car and they are much better for online purchases because if a transaction goes wrong you can ask for a refund - chargeback from the card company.
Like others, mine pays back every month automatically.

Why on earth were the credit cards in your name only and not joint names,,

Young people are pushed into a consumer society. New homes are expensive, but they come with fitted carpets, curtains, white goods, ready made gardens. Cars come with 0% finance. I could afford none of these when we got married. So they start with a bigger debt and it becomes the norm to want something and have it now and not save or live within your means.

There is, of course, the lack of help to obtain benefits, discounts, low rates for those in need. My generation had a "claimants union" that pointed people to their entitlements and help, liaised with creditors, ran an emergency food and clothing bank and helped with temporary homing - but then we had decent social housing and were not expected to buy and in most areas, decent public transport.
We also had, until recently, firms with a conscience that retained and retrained its staff, instead of the US attitude of treating them as disposable "resource"

JennyCee

I haven’t had a CC in years due to ex hubby overspending - and how!!! He had been sent about 12 CCs. He eventually sorted it out and like me will not entertain one now. It was the fault of the banks and financial companies who gave them to him to pay the off all the previous debts, and so it went on.
No one NEEDS one.

But you do NEED a credit card, in order to get a credit record should you want a mortgage or a car loan.

I quite agree that for some people they are best never owned, but a good 90% of us, I should think, have had credit cards for years without them ever being a temptation to overspend.

Hard cases make bad law and bad rules for how other people can live. I have had a credit card since they were first issued. My first credit limit was £36. I have never in over 60 years, reached my credit limit or been unable to make a monthly payment, and that applies to most people.

There is a lady on FB called the complaint cow, she is brilliant with complaints, helps for free (so long as you say please and thank you). She's written books about

I pay off my credit card every month and get cash back which paid for 2 theatre tickets this time round. However, if I cannot afford something I don’t buy it. Credit cards give peace of mind on items over £100 but on debit cards you can use charge back if necessary.
When I was teaching PSHCE financial management was included in the syllabus and I remember students being astonished that their parents had to pay for water!
I have been skint, not broke, and recall the mortgage rate soaring to 17% just as I bought out my ex. I had a child to support, bills etc so I had a lodger which worked well for many years until I earned enough to be self sufficient. It was a scary time but we survived

Credit cards offer extra protection and mine also does cashback on some categories of purchases, I always pay it off before it's due.

I haven’t had a CC in years due to ex hubby overspending - and how!!! He had been sent about 12 CCs. He eventually sorted it out and like me will not entertain one now. It was the fault of the banks and financial companies who gave them to him to pay the off all the previous debts, and so it went on.
No one NEEDS one.