She's On The Money - Sneaky Ways Credit Card Companies Keep You In Debt

Episode Date: July 25, 2023

Sadly but not surprisingly it is in the interest of credit card companies to keep you in a cycle of debt. And on top of social and life pressures that push us towards spiralling consumer debt, the companies themselves have mastered the art of manipulation to trap you. So today on the show we are breaking down the sneaky ways credit card companies keep you in debt and then we’re going to tell you what you can do to break out of the cycle! Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements. The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs.  Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708,  AFSL - 451289.See omnystudio.com/listener for privacy information.

Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kernai, Wolperi and Awadjeri woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on Awadjeri country, acknowledging the elders, the ancestors and the next generation coming through. As this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow. Let's get into it. She's on the money.

She's on the money. Hello and welcome to She's on the Money, the podcast for millennials who want financial freedom. My name is Bec Syed and today we have Victoria Devine. Hello. Thank you for having me on your show, Bec Syed. Thank you so much for being here. Today, what I really want to talk about for you as my guest for just one episode only is debt. I hate debt. Love talking about it though. So this is the perfect show for me. I think we're going to have a bit of fun this episode. I'm ready. I'm ready.

So, V, did you know that according to Finder.com, there are 13,356,291 credit cards in Australia as of April 2023, netting a national debt accruing interest of $18.6 billion. That's hectic. That's vile. Oh, my God. That's hectic. I mean, it doesn't surprise me at all, let's be brutally honest. I also think, let's just preface this episode before we get any deeper. Are we here, Bec, to crucify credit cards?

No. Absolutely not. I think it's so important that we preface it up front. I'm not here to crucify you if you use a credit card. We do need to be educated about it, though, and we do need to use them in an educated way that helps us along our financial journey. But I think that right now, if you're listening to this and you're like, oh, they're going to absolutely slam me.

I've really been struggling at the moment. I've put a few things on my credit card because I had to. Girl, that's all right. That's so fine. You're doing the best thing that you can with the tools and resources you have and I'm proud of you. Exactly right. However, we do need to talk about it so that at some point you can become completely debt free and that you don't rely on a credit card to make finance decisions because ultimately a credit card can be a really slippery slope. And Bec, you've spoken publicly before about how credit cards were a really slippery slope for you. Yes. I know that the situation you were in was a bit more of a, you had debt because you needed to have debt situation. Yes. But did you find that you were a bit,

I don't know, tap happy anyway, knowing that it technically wasn't your money? I think so. And obviously, you know, I was really, really young. I think I was like 18 or just a tiny baby when I got my first credit card. So for me thinking like I had never really been in a position where I could just go out and buy myself shoes or go out and buy nice things. And here I have a bunch of money that I have to pay off eventually, but not right now. Yeah, but it doesn't feel that pressing at the time, does it? It just took over at that point. So I think, yeah, I just was not in any position and I probably was a bit tap happy. Yeah. And I think it's important to note that

I've also been in that situation. Like I had a credit card. I got into $44,000 worth of personal debt. And none of that, Bec, was stuff I needed. Right. It was a car. It was for university. I did travel overseas for a few months and study abroad. Sure. I'm very, very well traveled now. She's very cultured. A culture. I learned nothing except a whole heap about French wine and how to order a pain au chocolat every single morning with my latte. And I regret nothing, honestly. I think it's kind of all you need. Created me into who I am today. And we can't be mad at that. No, But I think it's really important to talk about, I guess, how it's not that surprising that credit cards and the credit card companies that own those credit cards, they spend millions every

year, Bec, on researching ways to keep you in debt. I mean, they don't call it that. They call it marketing and they call it customer retention and they call it 6 million other things. But essentially, they're doing a whole heap of research, Bec, to keep you in debt, to make you feel comfortable with tapping a credit card instead of spending cash. And there's lots of different perks and ways that they do that. And you know what? There are going to be a lot of people in our community who do it really smartly, like points hacking. So many people do that. And I'm just like, this is genius. Points hacking. Yeah, absolutely. So Glenny James, our mate over on my millennial money. Sure. He's spoken very openly and also in text messages with me, which

I don't know. Sorry, Glennie, if I'm exposing you a little bit too much, but he always uses points to travel and like upgrade himself to business class. Right. One of my team members, Brooke, honestly, a points queen. Like I've never met anyone who is smarter about it. I'm not that smart. I'll just copy her. But she just cycles through different credit cards to get the sign on bonuses, to get the points organized and lined up so that she's getting free travel. That is so clever. Right? But these people are very good with money. So they're not using it to kind of tap happy on things that they don't need to spend on. They're actually doing it in a way that I don't think I

could trust myself to do. I do technically have a credit card for business because I'm kind of like, well, why aren't we making points on all of these business expenses? Because Beck, you're so expensive. Legit. You're like, I've got bills to pay. I've got bills to pay. I've got a fancy palette. Sorry, what can I say? Yeah, it's not your fault. Like, I respect it. But I think it's really important to talk about, I guess, social life pressures and things that push us towards consumer debt. And while some people might be listening to this and they're like, um, they're really helpful. You can use them constructively. Babe, I have ADHD. Give me a credit card, I will ruin my life again. And I'll have fun doing it. World record timing. I'll regret

it. But oh my gosh, it's like a spending spree. If you gave me a personal credit card, I'm done. It's over. I'm done. It's over. Do you know why I created our budget and cash flow masterclass? Because I couldn't control myself. Right. So it wasn't for you, Bec. I didn't create it for the community because I'm just so kind and generous. I created it because I was useless. Right. And then I realized it worked really well. And I was like, oh, I could probably share this with the community and help them too. Now that's nice. Do you know like more than 5,000 people have now done that course? Wow. Big dog energy. You've saved a lot of lives potentially. But there are still more than 13 million credit cards in Australia. So we've got a lot of work to do. That's true.

We're just really hitting the surface or whatever that saying is. Yeah. Yeah. Scraping the surface. Scraping the surface. How could I forget that? I like that. But today, I guess that's why we're talking about credit cards and we want to break down the sneaky, sneaky ways that credit card companies want to keep you in debt and keep trying to keep you in debt. And then we're going to tell you what you can do to kind of break out of that cycle. Because Bec, look at us. We both have broken out of the credit card cycle. We have. So are we not the best people to learn from? Absolutely. I think we're geniuses. I'm really excited about this. So V, let's talk about the sneaky tactics of what you might say, the trap. The tap trap. Let's start off with excessive interest rates.

Yeah, stunning place to start. So we already know that there's very high interest rates on credit cards and they're not very sexy. These interest rates at the very start, I feel like nobody gets a credit card with the intention of ever paying the interest rate, right? So like if you get a credit card, your interest rate might be anything from 14 to like, let's say 23% on average. No one looks at that and says, oh yeah, I'm happy to pay 23% more for my goods and services. You don't say that. You say, I'll pay it off in time. It'll be absolutely fine. But at the end of the day, your expenses, they accumulate really quickly, especially if you're carrying balances from month to month because, you know, maybe a car service popped up, maybe

something else popped up and you couldn't pay off your credit card. And I feel like the compounding interest can actually make debt repayment even harder. And a big chunk of your monthly payment actually goes towards interest charges than reducing that principal amount or the amount you actually owe. So from my perspective, the best thing that you can do is each and every single month, if you have a credit card, pay it off in full and get rid of it. And if you can't pay it off in full, do not add to it until it's completely gone. Don't use it again. Yeah. So I feel like this is a trap that so many of us run into. And we always talk about how sexy compound interest is, right? Like Einstein called it the eighth wonder of the world. And if I could come up with

a better catchphrase, I would use my own, but Einstein, thank you for the, I guess, borrow. But compound interest is sexy, right? Because I've spoken to you about it before. We've done a whole heap of investment podcasts where I teach you exactly what compound interest does to create wealth, essentially because of the rule of 72, which maybe one day I'll do an entire podcast on because it's a very interesting finance concept. The rule of 72 tells us that on average, every seven to 10 years, money doubles, right? So like if you invested $1,000, 10 years from now, it's worth $2,000. And this is how we create wealth. It's how wealth compounding works. The same thing happens in the credit card world. You just flip that chart

upside down. And instead of getting out of debt, you're getting in more and more debt the longer you have that credit card. And it can compound out of control. And ultimately, let's be honest, lots of people only pay the minimum amount. Exactly, V. So that's actually what we're going to talk about next. So the minimum payment trap. It is a trap. It is a trap. So you might have, Beg, gotten a few credit card statements in the mail a few times. Yes. What do they say? X amount is due on X date. Yep. Stunning. But it's the minimum amount, right? It's the minimum amount. They never say, hey, here's how much you owe us in general. It might be $2,000. They don't say, hey, you need to pay that off in order to not incur any interest. Yes. They say $52, please.

Do you know I know that number? Why? It was my minimum debt repayment way back when on my credit card. $52 is burnt into my brain. And I just remember being like, oh, $52 isn't that bad for all the money I've spent this month. It's pretty good. I know. Pretty sexy. That's all they care about. No worries. If I'd extrapolated that out, which obviously I have before, it would have taken me 46 years to pay off that credit card. Oh my God, that's hectic. Right? Yeah. Way back when I was practicing as a financial advisor, this would be like maybe 2019, I reckon. I saw a client that came in before I had a podcast and they were in my Facebook group and they were really, really stressed. If this is you, still love you, please like don't worry at all.

They came in and they had 12 maxed out credit cards, a personal loan and a mortgage. put that to the side but of their personal debt they had $165,000 worth of credit card debt and I remember being like how did you get here the answer to the way they got there is by lying essentially to the credit card companies to say no I don't have any other credit cards like it's all good it's all good and because they'd had them for a number of years they actually had those credit cards prior to the royal commission so like lending wasn't as tight as it is now so there are a lot more things in place to keep you safe and keep you out of debt so actually I really doubt that in 2023 you could achieve the same debt levels on a personal level sure and I extrapolated

out how long if you only paid the minimum repayments on all of their debt it would take like 170 years to get out oh my god isn't that insane yeah because of the interest rate on it like it blew my mind and obviously we went down the path of declaring bankruptcy and you know putting them in the best possible position and like they're doing well they're thriving now but it's one of those things where you just don't realize how much it compounds and this idea of the minimum payment trap totally exists and they look like they're doing you a favor to be like oh it's only 52 bucks and you go oh when I opened this bill I thought it would be so much more Yeah. No, that's so that you pay them interest and these companies still make a massive profit

and you actually aren't being put first. It's a super clever ploy to keep you in debt and they're not actually helping you in any way, shape or form. And it essentially just means that these interest charges accrue over time. And in the same way compound interest works in a very sexy investment way, it's a very unsexy thing that it does when applied to a credit card. That is so sneaky. It's so icky. How do we fight that? I feel like it's a privilege to say, pay off your entire credit card. So nice if you can, but pay more than the minimum. Like what can you afford to pay off your credit card this month genuinely? So like if the minimum is $52, maybe

you've got $150 that you could put on credit. Do that. Please do that. You might have a couple of thousand owing, but I promise that decision will put you miles ahead in terms of getting out of debt and staying out of debt. And it's also just really good money habits to be paying off more than you necessarily need to because minimum repayments on a credit card, not sexy at all. That's a really good point. And I think that, yeah, if you can, do. If not, don't stress because we are here to give you more pointers. Next up, what we have is hidden fees and fine print. Very sexy. Very sexy.

Do you know what the biggest lie in the entire world is? What is it? I reckon it's when you scroll through any terms and conditions and then you tick that box that It says, I acknowledge that I have read all of the terms and conditions and I consent to them. Right. Have you ever read your phone's terms and conditions? Never in my entire life.

But you consented to them, right? True, yes. And then we all act so offended when we're like, what do you mean they can spy on us? It was in the terms and conditions. Like it was clearly articulated to you, but you didn't read it. I was never told, no, you didn't read it when you got the opportunity to. Same thing with credit cards, right?

They're not spying on us. This isn't some kind of government propaganda stuff, but so many of us are just scrolling through the T's and C's and not actually, I guess, understanding how they impact us. And essentially credit card companies, which I'm obviously not going to earn a sponsorship for this because I'm throwing credit card companies straight under the bus back, but guess what? Someone's got to. I'm driving.

So it's all good. Yeah. Straight up and over. I'm going to accelerate because I don't want to work with credit card companies because I don't think that they put you in the best possible position. So credit card companies essentially bury additional fees and charges like the annual credit card fee or late payment fees or balance transfer fees. They put it in complex language into your terms and conditions. So essentially you'll pay them more money. And you'll just go, oh, it's fine. I won't do a balance

transfer. You probably will if you rack up some debt. What do you mean annual fee? That's fine. it's worth it for all the bells and whistles you get. No, it's not. No. Why are we paying 500 bucks sometimes to get a credit card? You're paying for the privilege to pay them interest? Absolutely not. So I think when we're looking at getting a credit card, if you need one for any reason, we need to really weigh up what are these additional fees? How do they benefit me? Because paying a fee on a credit card can sometimes actually be beneficial. So I'm not a credit card sales rep at all. But as I said, I've got a business credit card and I ultimately chose one that has an annual fee. And I did that because I get a number of benefits that I wouldn't

have gotten on a normal credit card that I think serve my business. So you guys know, I travel all the time for work and I often take my team. If I book on my credit card, lounge access for me and my team. Beautiful. Isn't that nice? That is very nice. I'm happy to pay for that privilege. travel insurance can be really helpful. I don't believe that credit card companies have comprehensive enough travel insurance for you to actually lean on it 100%. We've talked about this before. I always get a standalone policy, but I kind of like the idea that there would be some additional buffer or some backup if I do lose something. Because often when I'm paying for my travel insurance, Bec, you've heard me rant about this before, my priority is actually my physical

health. Like if something happens to me overseas, I want to know that I can get home. I'm not really caring too much about my luggage or things in that luggage and what their value is. And I find that that's where my credit card policy tops it up because they might say up to $10,000 worth of X, Y, Z. And I go, yeah, right. That's nice to have because then I can focus on my physical health for my insurance policy that I take out for travel. It's one of those things where you just really need to look into, one, whether they benefit you or not, but they are taking advantage of your lack of awareness of these things. And they're just genuinely taking advantage of the fact that they're going to increase their revenue through fees that you didn't really know about.

And you know what they do? They just whack them on your credit card. They don't like message you and say, this bill's due. They just add it to your credit card. So at the end of the month, it's just got an extra forfeity, you know? Of course. It's so rude. I know, it is very rude. V, I think let's go to a really quick break. And when we come back, we're going to be telling you about all the other little ploys and tactics.

I can't wait. Let me add it. Okay, V, we are back. Hot. And I don't know if you're filled with rage, but I'm almost there. I'm always filled with rage. Always filled with rage. Raging feminist over here.

we are talking about the little tactics tips and tricks that credit card companies use against us to keep us trapped in this endless cycle of debt doesn't have to be endless though it doesn't have to be endless we can get out of it we can get out of it so hot next one i want to talk about is the reward programs it sounds exciting yeah they are they're very enticing little programs that credit card companies put together like they might have like enticing stuff you know what sexy cash back. Oh, I love a bit of cash back. Yeah, they're going to use that. Do you know what else is sexy? Free flats. Oh, I love that. They're going to use that. They're going to use it. They're going to tell you that you can get it. I told you before, lounge access. They got me on that one. God,

this is so sneaky. Discounts on other things that you might want to purchase, like they might give you discounts on like insurance or like tickets to shows or something. We've talked about all of these before. Yeah, I can't be trusted with them because I literally just told you that one of the reasons why I picked my business credit card, lounge access, insurance. I'm like, yep, give me those reward perks. They are worth it to me, but I do know that they are worth it. So not in general worth it, but after I assessed the circumstances for my business and for myself, it made sense. We're not saying they're going to make sense for you, Bec, but these are shiny little things that they add to say, do you want to stay in debt with us? You go, yeah, I'd love to. I'd love to stay

in debt with you. Oh, that's so nice of you to ask. You're the only one I want. I know. I love you. So these programs are essentially often designed to encourage spending that you weren't planning for and to get you really dependent on your credit card. Cheeky. It's like a little abusive relationship. How nice. They're like, you need us. And I'm like, yeah, I do. I do. So you might overspend to reach different reward thresholds. So like you might go, oh, well, if I do this amount of spending in the first three months, I'm going to get those bonus points. That's enticing. I would never have spent $3,000 normally, but I really need those bonus points. Totally. Please come at me. Really sexy. I just really want to stay in debt

now because I want all of those rewards and benefits. Why do you think they've got them there, Bec? Well, they're nice. Let's think about the marketing, right? I'm just kidding. They're not going, I really love Bec. I wish that she had some travel insurance, though when she traveled they really care they really care about keeping you in debt yes like they're like let's keep back as a customer they don't have a team called the keep people in debt team sure but they do have the customer retention team which is essentially the same thing so just remember that all of these things are ultimately designed by credit card companies to keep you in debt and usually they win. Gosh, so rude. So rude. So this is coming at a funny time because I feel

like we are getting more aggressive than we are aggressive. Yeah, what is it? Let's talk about aggressive marketing tactics. Yeah, I love an aggressive marketing tactic. I've never employed one myself because I just don't think it suits my personality. Maybe it does. You need to get financially literate. Honestly, I'd listen to you. Yeah, I think you already do though. So let's just That doesn't count. Absolutely not. Even just saying that makes me feel a little bit ill. But essentially, credit card companies, they invest heavily into their marketing strategies

to attract new customers because the return on investment, it's worth it. Right. They're not going to invest in things that aren't worth it because credit cards have existed for many, many a year. Millennia. Exactly. So they've had heaps of time to go, if we invest this amount of marketing money into this area, we're probably going to see an ROI or a return on investment of X, Y, Z, right? So they

only keep doing it. Of course. I think the ones that kind of make cold calls or like stand in the middle of a shopping center and ask. Yeah, it could be an advertisement on telly. It could be like, you know, the banner ads that you see while driving your car, the billboards, anything. And do you know what? All of those things play into human psychology. Like, have you ever seen someone holding a credit card with, like, no emotion on their face and they're trying to sell it? Absolutely not. No, they always look so happy.

But they'll be holding their credit card and they're like, look how happy I am with this credit card. And I believe them every time. And you believe them because you go, I'm not happy, but I could be. I could be really happy. I could be. Yep, yep, yep, absolutely. I get sold the dream all the time.

Do you know how? How? By going to my local cafe every morning, right? So there's, like, the line out the front of all the depressed people and then there's these people walking out, massive smiles on their face, holding their fresh cup of joe. Cup of joe. And I'm like, I'm going to be like them. Yeah. So I get my coffee. That's how they do it. So I can't afford property back. I know, that's very true. I'm joking. If you just stopped drinking coffee. I'm joking. But did you see that that new app

recently, Threads, has come out? Yeah, I love Threads. I am obsessed with Threads. Do I? I would follow you because I automatically follow everybody that I follow. But it's where I came to thrive. Like, you know, if you thought I was okay at Instagram, I'm not. I'm killing it at Threads. Threads is your place. It's my place to shine because I can rely on being a sassy little SH1T as opposed to like looking hot, which does not work for me. I was not born to be an influencer. I was born to be a pest and a pest I will continue to be. I'm so happy they made Threads just for this reason. It was just for me. Now you can be as much of a pest as you want. I am. Anyway, I put up a thread the other day and it got a lot of attention because I was like,

you can have your coffee as a little treaty treat because we're still not going to be able to afford property. Bye. It really made me feel comforted, to be honest with you, because I'm like, okay, well. It's true. I did the maths and I was like, look, it's like $1,400 a year if you had a coffee every morning, which is, you know, $1,400 is a lot. But like, that's not going to get you closer to owning your own home. So have your coffee, be a little bit happy, save in a different way. Yes, so true. So sad. Anyway, those aggressive marketing tactics, maybe they should employ me because I'm like really good at them. But essentially, they are trying to entice you in with ads and promo offers. And they're essentially, let's be honest, disgustingly, they are targeting

vulnerable people who might already be struggling with debt or struggling to pay the bills month to month because, you know, a credit card could be a very cool tool to, you know, take some financial pressure off, right? And that's why we all get credit cards, right? Because we need access to funds that are not ours. That is so true. V, with all of that in mind, let's tell people how they can kind of avoid these and maybe some things to keep in mind when we are faced with these little challenges. I'm going to start off with creating a budget. Should we do something like that? So a budget, underrated tool. It's the most underrated tool of 2023. No one wants to do a budget because budget feels like it's restrictive, but go on to the days of restrictive

budgets. A budget for me is a tool that tells me how many dollars I have coming in and how many dollars I have going out and whether they're being spent in line with the goals and the values that I have. You know what? If I look at your budget, Bec, and I say that 100% of it is going to Uber Eats, do you know what? I don't care. I literally don't care because what I'm looking at your budget for is to educate you on, oh, Bec, did you realize so much of your money is going here? You might go, yeah, because I love it. And I go, great, Bec, that's exactly what we want to hear. Or you might go, oh, oh my gosh, no, I had no idea. Oh, maybe I should change a few things about my lifestyle because that's not something that I actually want to engage in. I didn't

realize how much that added up. And I think that often we forget how things can add up. so like you know our coffee here and there you might go you know what my five dollar latte every single week or every single day if you're me it's worth it like I think I've said on the pod before it's one of my favorite things in the entire world I go for a walk with my husband and my dog and we get our overpriced lattes every single morning not from the cafe I've got beef with don't worry I've got a new cafe good it's all right it's all right I've got a new cafe got a new hood but I adore that it's one of my favorite things in the entire world so if I sat down with someone and they were trying to help me with my budget and they said, Victoria, because I've looked at my

budget, Steve and I spend more than $3,000 a year on coffee. That's a lot, right? Because it's for two people. It's not just for one. But to us, that $3,000 is so much more than just two cups of coffee. It's that time that we have together in the morning. It's that connection. It's so much more. And I think that it's so rude when people just look at your budget and go, oh, Bec, that's not worth it to me so you should get rid of it right you need less streaming services okay well maybe i do but have we thought about my lifestyle maybe my entire life and this is absolutely not true for you beck because you are the most social butterfly i have met in the entire world i swear every monday and tuesday that we sit down together i'll be like how was your weekend you're like i

was at a house party how am i wrong you are not wrong that is very nice that's you too you are the most social person ever. But take my streaming service off me, I'd be like, wait, what do you mean? Like, that's like my wind down time. I don't actually go out that often. I don't go out for dinner once a week at all. I'm lucky if I go out for dinner once a month. Like, yes, I could afford to go out for dinner, but like, I just want to be at home. I want to be with my pets. That's something that I value. So I think it's so important to look at a budget and go, all right, let's develop a really realistic budget that's reflective of our goals and our values and what we're trying to achieve so that we can track our income and expenses and prioritize debt

repayment without being judgmental. Because what's that help? Does it help at all to sit down and do a budget and be like, oh, I feel so bad about this? No. Who are you helping? Nobody. You're just making yourself feel trash about it for no good reason. Exactly. You're going to change it. How good? Exactly. So let's just like forget about the feeling bad part. But essentially by following a budget and allocating funds towards paying off debt and credit card, you are preventing yourself from spiraling out of control, but you're also putting yourself in a position of power. Because sometimes, and Bec, I know you've been here, paying off debt feels like trash. It feels like you're just flushing money down the drain because you already spent it, right? Yeah. But if you

create a debt repayment plan, let's pretend you are repaying debt of $400 a month. Ew, that feels yuck, right? Because you're like, I'm flushing $400 down the drain. No, you're not. Once you've finished paying off that debt, Bec, you're going to be saving $400 a month. Yeah. Look at that habit you've started. Look at that system you've created. So the second that debt's gone, oh my gosh, you're going to turbocharge your savings. You're going to be an investing queen. You were going to do so many things that you've always wanted to do, but I promise it starts with getting rid of your debt because there is no point having a heap of savings in the bank, but also holding significant debt because they cancel each other out. It's not sexy. In saying that, I do genuinely

believe that everybody who is in consumer debt needs to have an emergency fund still to stop them going further into consumer debt. But that's a different conversation for another day, Bec. That is a really good point, V. This point I'm about to make, I did it really, really poorly, but basically I tried to consolidate my debts. And I think that what I was thinking at the time was I'm going to consolidate these debts and I'm going to ask for way more than I need so that I have a little bit of money to spend on bills and whatever else. You were a bit more comfy. Yes.

And then that just snowballed and snowballed and snowballed. But that aside, it is not a bad idea, would you say, to try and maybe consider? No, it's not a bad idea at all. I mean, don't go and take out more money because it's attractive. But if you have multiple credit cards with high interest rates, debt consolidation is something you could consider looking at because what debt consolidation does is it rolls all of those debts together and usually gives you a lower interest rate so you can pay it off with less interest going to be incurred over the long term. I think when it

comes to debt consolidation, there's two streams of thought. There's that thought of let's consolidate it so we get a lower interest rate and we can pay it off reasonably over a period of time that suits us and we're not crippled by consistent debt repayments. It's overwhelming when you have so many credit cards that you actually need to pay off. So I do feel like consolidating it into one payment, even if it is the same amount of, I guess, interest can feel a little bit freeing because you've only got one payment, right? And there's really, really solid terms. I do think it can be a little bit of a trap for some people too. If you see consolidate to this particular a credit card and you'll get 0% interest for the first six months. Unless you can actually pay that

debt off in six months, that change is probably going to shoot you in the foot. And I know a lot of people in our community have been bitten by that because they'll go, oh my gosh, I don't want to pay interest for six months. That's great. And so they take their 18% credit card and they roll it into this other one. They get six months of interest free time, but because it was interest free, they didn't prioritize it because whatever, like it's just interest free right there. And then after six months, it changes to 22% interest and you're in a worse position than when you started. Sure. So we need to make sure that debt consolidation is done properly. So go see a finance broker. Obviously, shameless plug, our team at Zella Money do that. But essentially,

simplifying your payments, it can essentially save you money in the long term. I love that. And then finally, I think we can both agree on this one, seek professional help. Exactly. A podcast, my friend, if you are in this sticky, sticky position, not enough. I mean, hopefully it's been enough to like motivate you and you're like, I want to get my budget and cash flow in place and I really want to be out of debt and I don't want to rely on credit cards. Like that's the sexiest thing I've ever heard in my whole life, Bec. Absolutely. Good stuff. I'm so excited about it. But essentially, if you're finding yourself in overwhelming debt, there's no shame in reaching out for help. Nobody, I promise, nobody cares more than you do.

like nobody's looking at you going, oh, Bec, I can't believe you just admitted to that. They're literally like, oh my God, Bec, congrats on taking the first step to being out of this circumstance. The sooner you reach for help, the sooner you're going to be out of debt and the easier the circumstances are going to be, I promise. The longer you leave your head in the sand, the worse things are going to get. So I have a few of my, I guess, favorite and trusted resources that we will obviously put in the show notes. The National Debt Helpline is one of my favorite resources. And it's not just because it's easy. It's because it's free. It's free financial counseling, Bec. The team there are gorgeous. I have worked with them before,

not on a like they've paid me way. I have reached out to them and been like, how do we work together? Because you guys are legends and I think that what you're doing is Epic. They provide guidance and tailored advice to your circumstances. They have financial counseling. They can send you to a financial advisor. If you're in a super, super tricky circumstance, they can help you with a part nine debt agreement, or they can help you with filing for bankruptcy, or they could talk you through what those things mean. They can talk you through negotiating with your credit card company some time off if you need some time. They can do so many things and I would reach out to them. Honestly, they can help you with the

specific advice you might need to pay off your debt and I guess regain financial freedom. And then I guess if you're not in as sticky a situation as needing the National Debt Helpline, let's just do a little shameless plug. My Budget and Cashflow Masterclass I created for me to get me out of debt because I'm a bit neuro spicy and I need a lot of structure and I need it to work for me. So I'm not the type of person that you can sit down and be like, oh, Victoria, write a budget. Right. And then I go, yeah, great. I'll stick to this. Absolutely not. Like if I write a budget, I'll be like groceries, X, you know, gym membership, X, rent, X. What do I do? Go away with that budget and do what, Bec? Am I meant to implement that? I'm not going to implement that.

No. So I created this budgeting cashflow masterclass that essentially takes that budget, overlays it into a banking structure and tells you how much you need in each account to live the lifestyle that you've said you are living from your budget. So I'll say, all right, here's your food, your fuel and your fun money each and every single week, Bec. If you run out, you're eating noodles this week and that's okay because it means that every other bill in your life is catered for. You're not going to miss your red Joe. You're not going to miss your rent. You're not going to miss anything. But if you just kind of like throw your money up against a wall this week in your spending amount, well, that's all good because like we can just live on noodles

until next Thursday, right? So I created that to put you in the best possible position. Literally thousands of people have done it now. People have used it to get out of debt, to stay out of debt, to save for their first homes, to save for overseas trips and save for 6 million things. Honestly, I'm really proud of it. Do we think we should give them a discount? I think we should give them a discount. I'm in a good mood. Let's do it. So it's not active at the moment, but I will make sure that by the time this episode goes live, the code POD50, so pod 50, is a code to get 50 bucks off the budget and cashflow masterclass. God, she's good. We're so generous. That is so nice, V. I'll make sure Jess turns that back on. If it's not on, please message me and it will be

the kick up the butt that I need. Jess, if you're listening to this, hello and please activate that. I, Jess, love you. That's our code. All right. V, I think this is a really good place to end it. I'm so done. I'm so tired. And I heard there's a fancy lunch going on. So let's go. I can hear them celebrating. Let's go eat. All right. Have a good day, guys. Love you. Love you guys. Bye. The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and

should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN 321 649 27708 AFSL 451 289. Thank you.