Rationalising just how much you have paid

midnitegremlin

OK, a proper post from me for once. :rotfl:

Do you think about all the money you have paid to be in debt? Interest, fees etc. Or do you put it out of your mind?

I'm thinking of mine, across 10 debts, I've actually done OK. Not brilliantly, but eg MBNA over 13 years I've paid about double the ammount they have given me- ie, I've paid as much in interest as I've borrowed from them. Whilse that sounds a lot, it's over 13 years.

Barclaycard I've had low rates and flexibility, so in fact better value than a loan.

Others, like Capital One I havn't done so well on.

One thing though, I've paid out a LOT more than I've borrowed. Such is the nature of credit. Hey Ho. And of course, over the years, anyone with a mortgage spends £10000s on interest, thats just how it is. But you have a house to show for it at the end of course. Whatever, lessons learned from the past!!!

getmore4less

Not sure it's worth mulling over other than a reminder that you could have used the money for something else.

The typical house purchase used to be double the cost when you take into account the interest, gone down a lot with low rates but people tend to borrow on longer terms these days which puts it back up again

£100k @ 4% 25y total cost £158,351
£100k @ 4% 35y total cost £185,965

MERFE

Try not to think about it but it does help to prevent using more credit. When I am tempted I think how much extra it will cost and it helps me to save for something instead of impulse buying.

midnitegremlin

Yeah, I try to be rational about it- with some stuff like Capital One I've been well ripped off, but oh well, it's my fault. But across Three barclaycards, originally one was Egg and another was Morgan Stanley originally, I've essentially had loans with major flexibility and a really good rate of interest, so it's not so bad; in fact, taking into account rising prices, I might even be up on the deal - or close to breaking even.

There is a little bit of random chance to it all- MNBA let me pay off my balance at 0% for 5 years, which is nice.

matchboxfull

It did occur to me a few days ago that, given I still have most of our old credit card bills, I could sit down and work it out. But then I realised that that would make me feel terrible so I didn't.

As others above I think about it in vague terms. It helps prevent me (us) from taking any further credit.

Saying that, we're just about to embark on our first mortgage, but I justify the interest by holding onto the idea that, all being well, we won't pay out more than the house ends up being worth. It's the biggest house we'll ever need, as well, so further moves will hopefully be a case of downsizing and cashing in.

After the mortgage draws down I'm going to do the old switcheroo on our bank accounts for incentives. It'll be the first time I've made money from a bank rather than the other way round. Struggling to get my head around that!