In my last post on the subject of debt, I quoted an article by Simon Read in The Independent, where he urged people to “ditch the plastic” before they were “forced into distressed borrowing”. I think his story was repeated over several editions of the paper, with the most memorable headline being “Maxed-out Britain.”

Case study

What I didn’t say was that there was a case study attached to the article. It was the story of Catherine Hughes, who had major surgery that left her too ill to work, so that she and her husband – with four children – lost 50% of their household income.

[The case study isn’t available online, so you’ll have to take my word for it.]

Catherine was a freelance writer, her husband a heating engineer; because the family income fluctuated a lot, they had been using credit cards to finance the peaks and troughs.

Card providers unhelpful

They had debts with three credit card companies; that’s a relatively prudent and small number, compared with some people, e.g. yours truly when I went through my debt crisis ten years ago.

Two of those companies had cut off credit and all three have been very unhelpful, says Catherine.

Facing the worst?

Catherine went on: “They hold all the power. We try to stay positive and are doing the best we can but if I were to sit down and add the debts up, that would probably reduce me to tears.

“If the card companies would look at our situation on a more personal level [that would help]. We’d welcome a reduction in the interest rates.”

“Banks and card lenders should be more willing to work with people instead of … coming down on them like a ton of bricks [when they can’t meet the payments]. There should be a middle ground; but our experience shows that there is not.”

Interest rates: all-time low for whom?

Catherine mentioned interest rates. This morning on the radio I heard Mark Hoban, who is Financial Secretary to the Treasury here in the good old UK. When challenged about how he could counteract the slump in consumer confidence, he pointed to the fact that his Government had been successful in keeping interest rates at an all-time low.

If you talk of the base rate, that is true: 0.5% for a long time now. (Although some would say that because the rate is now set by the independent Bank of England Monetary Policy Committee, the Government can’t take credit for it)

Rate inflation

Now I don’t know what rate Catherine and her husband were paying on their cards but I know for sure it wasn’t 0.5%.

It was probably 15% or more; much more than 15% if any of them were store-cards. Go figure, as you guys say, I think, on the other side of “the pond”. Admittedly, if they were owner-occupiers their mortgage would have been much cheaper than before. The paper didn’t say whether they were home-owners or tenants. If the latter, the knowledge that our base rate is only 0.5% would be a sick joke for that particular family.

Can you face the facts? Should you?

Catherine had said that she’d be reduced to tears if she sat down and added up the debts. Well, I don’t want to bring more tears into her life but I do advise in my book “Back to the Black” that it is generally helpful – and I stress generally; no two cases are identical – to do exactly that. I found this out myself, when I owed money to 26 different creditors at the height of my money problems. I had a rough idea of the total but it was only a rough idea and there was a very heavy Sword of Damocles hanging over me. When I eventually bit the bullet (sorry about the mixed metaphors, lethal-weapon-wise) and sat down to make a detailed list of amounts, credit limits (many of which I had already exceeded) and interest rates, it was therapeutic. I felt much less stressed when I knew the worst.

It worked for me; I don’t say it works for everyone but if you think you can handle it, it’s a step I recommend. After all, you can’t start to make plans about how to solve the problem until you know the scale of it.

Debt-free Christmas?

In my last post I mentioned the US blogger Brad Chaffee and his “Debt-Free Christmas” discussion. It seems an impossible dream … but I plan to write more about this very soon.



For Simon Read’s article in the Independent, 6 Nov 2011:

For info on my e-book “Back to the Black: how to become debt-free and stay that way”:  

Kindle version:

Other versions:


A couple of recent stories by Simon Read in the UK’s “Independent” newspaper  (see below) reveal that UK consumers are once again extending their credit card debt, after a period when the trend seemed to be reversing.

What’s more, they are using cards not for luxuries (i.e. “discretionary spending”) but on essentials.

Christmas is coming: the debts are getting fat

The situation for many of those “hard-working families”, as our politicians like to call them (surely that’s discrimination against single people and lazy people?) will probably get worse in a month or two. Why? Not just because of the underlying economic situation and rising inflation, but because of the “retail eternity” (to quote my hero Loudon Wainwright III) that we call Christmas.

Peer pressure

 We have been conditioned to believe that one can’t celebrate Christmas properly without spending a load of money. So those in debt are going to get deeper in debt. If you have young children, peer pressure and the blandishments of advertisers will try hard to ensure it.

US blogger promotes debt-free Christmas

That’s why I gave three hearty cheers when I found that an American blogger called Brad Chaffee had started a discussion thread called “Debt-Free Christmas”. I communicated with Brad and told him how much I liked the idea; he got back to me promptly, saying that the concept was very much alive and well in his family, even if the blog thread is less active right now.

Practical solutions?

What I take as the meaning of his “Debt-Free Christmas” was not so much to get right out of debt at this time of year – that would be a very tough aspiration – but how to find practical ways of having a great Christmas without getting further into debt; despite inflation and peer pressures.

Gift spend limit

In future posts I’ll be talking about how we’ve done it in my family. The most successful method was putting a limit on the gift spend per person. That forced a rethink, compared with the previous procedure of: “Oh God, only a week to go and I haven’t finished my gift shopping; must throw some more money at the problem”.

The new rule didn’t just save money, it unleashed lots of creativity.And we had just as much fun, maybe more.

Over to you

I’d like to throw this open. All contributions welcome!




For Simon Read’s article in the Independent, 6 Nov 2011:


For info on my e-book “Back to the Black: how to become debt-free and stay that way”:  


Kindle version:

Other versions: