£2m in Interest through Persistent Debt

boo_star

nick74 said:

Nothing in this scenario adds up.

For example most final salary pensions are index linked, so to have a pension of £115k now she would have started off with a pension of about £70k per annum in 2000, adjusted for inflation. A £70k pension in 2000-2001 would have given her about £4100 net per month.

Also, even considering the insane lending practices of the late 90s/early 00s, who would have given someone on a £70k pension combined credit limits of over £300K? Even if she had a pre-retirement income of say £150k, and the cards were split over a dozen different lenders it doesn't ring true.

Then there are the monthly repayments. If memory serves, the majority of cards back then used to calculate the minimum monthly repayment by adding the interest to the balance then taking the minimum as around 3-5% of the total. So on £310k of debt the minimum payment would have been over £12k per month.

So, in summary we have someone on £70k managing to borrow £310k on cards, then making a £12k minimum payment every month with a net monthly income of £4k......and the OP wonders why no one believes them?

I'd also add that with an average APR in the low thirties a decent amount of it is likely to be subprime borrowing.  And subprime lenders just don't offer high credit limits. Certainly not enough to make up maybe 50% of the overall debt.