SUE’S GUIDE TO Coming Clean About Debt
Are you hiding a financial secret? One in five of us hide debts from our partners according to Direct Line Life Insurance, and the average “hidden” debt is over £8,000.
In most cases it can be a mix of credit cards, personal loans, store cards and even money borrowed from family and friends.
If you’re struggling to pay off debts, it can have an impact not only on your emotional wellbeing but also in terms of your future finances.
Missing payments or only making the minimum repayment every month on credit cards can all impact on your ability to borrow money in the future.
And it won’t just affect you. If you’ve got joint finances, like a mortgage or joint account, your money habits will be taken into account if you need to borrow more, or open other accounts as a couple in the future.
It’s easy to fall into the trap of thinking you’re doing ok with your credit cards if you’re just managing to keep making the minimum monthly repayments.
You will –eventually – clear the debt this way, but because of the way these minimum payments are set, it can take many years to repay the full amount along with any interest owed.
In fact the Financial Conduct Authority, (the money regulator), worked out that it could take you over 27 years to repay a credit card debt of £3,000, based on a typical interest rate of 19%.