18 yr old given store card despite having no credit history - help!

Rupert_Bear

MZie wrote: »

Hi,

My sister was given a Debenhams credit card when she was just 18 and had no credit card rating. My sister had asked for a store card, but was given the mastercard instead (she was able to use this anywhere). At the time she was working as a full-time waitress and being paid below the minimum wage.

Her card had a £1,000 credit limit which she has maxed out, and is struggling to meet repayments esp. as the card has a 29.9% annual interest rate. As a consequence, she is unable to afford to go back and study and I'm worried that she will not be able to get credit in the future when she really needs it for something like a mortgage.

Surely she should have never been given the card in the first place, as there was no way that she could have afforded to pay the card off? Is there anything she can do about that?

Thanks

Whether it it was right or not the situation is the lady has been reckless in using the card and needs some help and support on how to manage her finances better. Perhaps if you try the debt forum board they can help her sort her money problems out.

UnoriginalGuy_2

Half of me thinks she deserves what she gets for blowing a thousand pound just because she had the credit to do so... But maybe this will be a valuable lesson about money you have Vs. money you can get ahold of...

Anyway, I agree with above, she needs to get it off that card ASAP. You will never beat that 30%~ APR. The options are:
- Bank Loan (with lower APR - 17~7%)
- CC with free transfer period (even if the APR is higher, she can transfer it again)
- Private Loan

I think the CC with free transfer period is the easiest and best option. If they give you enough limit to transfer the entire debt then obviously do it, but otherwise attempt to pay off the remaining balance on the 30% and worry about the interest free period card later. If worse comes to worst open another account and transfer it to that!

DrScotsman

stephane wrote: »

One of the sad thing is that at 18 no one (almost) knows anything about money, debt and the potential consequences, it is not something they are prepared for and trust me I have had my fair share of mistakes in my youth.

Not just talking to you, talking to everyone who shares this viewpoint.

Let's put it this way, legal definitions aside, 18 is either adult or child. I can understand either way. But in either case, 18 is long beyond the age where you would understand debt if you were educated about it (counting slightly incorrect but simple things like "Credit cards are evil" as educating, it gets the job done). Hence:

If you think 18 is an adult, it is their fault if they get into bad debt like this, they should have educated themselves about it in the first place.
If you think 18 is a child, it is the parents' fault for not educating them about bad debt. They've had many years to do it. If the parents' did so and the child didn't listen, it's the child's fault.

My point to everyone (especially the OP) being that there is no way it's the lender's fault.

Rupert_Bear

All with hindsight!

UnoriginalGuy_2

Rupert_Bear wrote: »

All with hindsight!

It doesn't take hindsight to know that borrowing 1k at 30% with a "below the minimum wage" job is a bad idea... Just common sense.

DrScotsman

Rupert_Bear wrote: »

All with hindsight!

Really?

It'd be nice to know, not how many 18 year olds get a credit card and spend on it irresponsibly, but what percentage of 18 year olds don't know that a credit card is something to do with debt, which of course should be sufficient to make a reasonable person stop and think.

I don't think my parents ever told me what one was, but I somehow knew. Must have been that Simpsons episode that taught me . Irresponsible borrowing in teenagers might go down after Confessions of a Shopaholic :rotfl:

hoyles10

I have been in the same situation. When I was 18 I took out a loan, credit card, store card and got myself into a lot of trouble with it all. I have posted the story somewhere else on here but the top and bottom of it was I had to take out an extra job 5 nights a week in a pub on top of my fulltime job to be able to afford to pay everything off.

This might be a good suggestion for your sister, take a job 2 or 3 nights a week and use the wages fro that towards paying off the debt.

It took me years to pay off my debt but once I did I kept on with the extra work apart from I could afford to drop one of my weekend shifts so I could go out with my mates and it was then all bonus money that I saved and got a deposit for a house through it. So eventually some good came out of the bad situation I was in.

Rupert_Bear

UnoriginalGuy wrote: »

It doesn't take hindsight to know that borrowing 1k at 30% with a "below the minimum wage" job is a bad idea... Just common sense.

What a clever fellow you are!:rotfl:

never-in-doubt

UnoriginalGuy wrote: »

It doesn't take hindsight to know that borrowing 1k at 30% with a "below the minimum wage" job is a bad idea... Just common sense.

Really? Maybe in your opinion but unfortunately if you switch the TV on you'll actually see we have 100,s of thousands of people that done similar or worse - you saying we're all a little daft then are you?

Did you miss the little fact - we're in a recession?

I think you need to sit down and evaluate what you're saying cos you're actually barking up the cherry tree looking for apples

UnoriginalGuy_2

Well first off, a lot of people in debt got there though a far more complex path (e.g. Mortgage base on housing prices during the boom) while a lot of others got laid off from their work and thus had to finance to keep from, for example, getting evicted. I have a fair amount of sympathy for those people.

But anyone can see that if you borrow 1K and cannot afford to pay it back then you will be subject to a high APR, and in this case it is a very high APR. You can say in hindsight that is a bad idea, but frankly even in foresight doing something that silly is a terrible idea.