The definition of a con is to persuade someone to do or believe something by lying to them. Now, "con" may be a strong word—or perhaps you may believe the wrong one—as I expect you likely have a credit card, use it, and see a great benefit.
I remember growing up and saying to myself, “I will never take out credit; I will only buy what I need with the money I have available.” But life happens! You get invited to Mauritius for a beautiful wedding at a five-star hotel with your partner. You don’t want to miss the opportunity or be seen as unable to afford nice things. So, you take out credit and go on that amazing holiday!

You only remember the good parts, and so you’re led to believe you made the right choice. Fast forward, and you haven’t quite paid off that holiday when Christmas comes along. Your kids are desperate for that new toy, and you don’t want to upset or disappoint them. Since your first experience with the credit card went well, you decide to use it again.
The bank increased your limit—if they think you’re good with money, you must be, right? Surely, they’re not just trying to get you to spend more so that they can pocket more interest? You’re confident you’ll get a pay rise soon, so you’ll just pay it off with that. Sound familiar? Like many things in life, debt can snowball. You find you’ve racked up more debt. You’re making your monthly payments and not falling behind, so you still think you’re in control. But perhaps you’re not keeping a close eye on your balances anymore. You may not realise it, or perhaps you don’t want to admit it, but your head is in the sand.
This may sound frightening, so brace yourself. If you have a credit card balance of £1,500, pay only the minimum, and your interest rate is 22.1%, you’ll be paying that off for 21 years and 11 months. That’s longer than some mortgage terms I arrange for clients! And what do you have to show for it?
I’m not writing this to upset anyone, but coming to terms with your finances and how much they may be holding you back in life could be a turning point. This is a taboo subject. You don’t talk about debt with friends or relatives, afraid of what they might think. You may be surprised to learn that many couples don’t talk about their debt until they can’t switch their mortgage deal and have to reveal the truth about why that is.
Of course, credit cards have their benefits. They can get you out of a tricky situation when the car breaks down and you have no choice because you need to get the kids to school, commute to work, or help Granny with her weekly shop. Credit cards can also help build your credit file, demonstrating to lenders that you’re reliable and pay your debts. This can increase your chances of securing a mortgage, especially if you have a small deposit.
If you’re seriously struggling with debt, there is support available, such as Citizens Advice and StepChange. However, please be extremely cautious of companies claiming they can consolidate all your payments into one smaller, more manageable payment without affecting your credit (scarily a common claim heard on Heart Radio, for example). This often refers to an Individual Voluntary Agreement (IVA), which does show on your credit file and does have a massive impact on getting a mortgage, remortgaging, raising equity, or any other mortgage-related activity for six years, its basically as bad as bankruptcy. If you do find a lender willing to help, they will likely be a specialist lender charging very high (usually unaffordable) interest rates.
So, this is your friendly reminder to take look at your finances! . Very few people are completely debt-free, and we should be open and honest with each other. By raising awareness of how we’re being driven to borrow more, we can make more informed choices, keep more money in our own pockets instead of the big banks’, and live financially stress-free lives. You're not alone!
Sarah x
Director of GoGreen Financial Services ltd
01635 242939
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