'I ran up £1,000s in debt while suffering from depression... now I'm digging myself out of it'
I usually write blogs as the 'MoneySavingIdiot', chronicling my attempts to practise what we preach at MSE (the last one was on switching bank accounts). But as this is a more personal blog, written ahead of World Mental Health Day, I thought it would be better coming from MSE Kelvin. So, here's my tale of my own mental health struggles and how I've battled credit card debt...
Update from MSE Kelvin, Tue 6 Oct 2020: I originally wrote this blog last year, but the message and logic still apply, so I'm adding this update for World Mental Health Day 2020 in case it can help during what's been a sucky year for anyone struggling with mental health and money.
Like a lot of people, my mental health's been a bit patchy during the pandemic, and at times I've not exactly been looking after my melon, but I'm trying to be a bit more proactive about taking care of myself and generally have more good days than bad, which isn't something I could see happening back when I first got sucked into the numbing gloop that is depression, and that's important to remember.
I remain a Debt-Free Wannabe, but my spending's under control apart from the odd splurge on poncey beer and garish pants. I've cut my total debt by over three-quarters now, but most importantly it's manageable. To paraphrase Martin in our Mental Health & Debt guide, it ain't quick or easy to sort debt, but it's never a lost cause – hopefully if you're not in a good place right now I'm some sort of proof of that.
How I fell into debt while suffering from depression
Some years ago, as a fast-living, low-earning young(er) gentleman in a big city, I didn't like to let money (or lack of it) limit what I could get up to. To be honest, money wasn't something I ever gave much thought to apart from when it ran out, which was often. So I started to pay for stuff on my credit card, telling myself I'd pay it off in full at the end of each month.
You can probably guess how that went – the end result was as grimly predictable as trench foot at Glastonbury.
While I was slowly getting into debt, it remained manageable (it was generated by pints more than plane tickets). But following a couple of crappy life events, I'd been struggling with my mental health and began to suffer from depression, leading to my debt spiralling – partly because I spent as a way to cope (loss of appetite definitely wasn't one of my symptoms), partly because I was drinking too much (another ill-advised coping mechanism) and partly because it's difficult to care about your finances when you've stopped caring about yourself.
As my debt spiralled and most other areas of my life span similarly out of control due to neglect, I struggled to see a way out. I hated myself for the mess I'd got into, which in turn led to me spending more to try and forget about it, which led to a bigger mess, me hating myself more and so on and so forth. It was a lonely place to be, the only upside of which was having my best-ever career on Football Manager Mobile as a result of rarely going outside.
But as Emmylou Harris once sang, the darkest hour is just before dawn. A mate who was worried about me suggested I ring Samaritans, leading to a phone call that mainly consisted of crying and snot (mine, I should add). It sounds miserable as, but it made me realise I was in a bad way and needed help, which was oddly comforting. After thinking about it, I felt the best way to do that was to get away. Fortunately for me, my folks were more than willing to take me in, so I left my job (tough call as I'd been there a while) and moved back to the countryside.
It had a positive impact on my mental health, and I started to look after myself again and slowly built up some confidence. But there was no getting away from my financial situation, which was pretty parlous – by then, my credit card statements were about as appealing as a diet based solely on Brussels sprouts...
How I started to shift my credit card debt
Being unemployed, the first thing I did was panic (Martin says not to in our Mental Health & Debt guide, but I didn't know who he was then – don't tell him that pls). I owed around £15,000 including overdraft and other debts, and while that may not sound like a lot to some, it was to me. And without a job, I couldn't cough up the minimum card payments each month any more than I could sneeze diamonds.
I didn't want to tell my folks about the situation I was in, as A) I felt very ashamed about it (NB: not helpful) and B) I knew they'd want to help me pay off my debt and, counter-productive as it sounds, it was important to my fragile self-esteem to tackle it myself. But I mentioned my predicament to a friend, and he suggested I try shifting my credit card debt to a 0% interest card. Googling it, the first thing that came up was MSE's Balance Transfers guide, and I gave it a goosey to get the gist.
With some trepidation, I headed to the Eligibility Calculator to find out what my chances of getting a card were, fearing my years of financial fecklessness, both of my own doing and as a result of my brain box not being in good shape, would have left my credit score lower than Atlantis. But I was wrong...
Bosh. I didn't end up getting the full £9,000 credit limit I'd applied for, but shifting £6,650 of credit card debt from over 20% interest to 0% interest was better than a poke in the eye with a sticky stick. The minimum payment on the original card dropped to a much less terrifying £24/month, while on the new card it was around £60/mth.
Around the same time I got a new job, started paying as much as I could afford off each card every month (about £250 in total), and things were looking up. It was only chipping away at a mountain, but it was more financially responsible than anything I'd done in the previous, er, 30-odd years.
What I did next
This bit should be about how I shifted the debt remaining on the original card to another 0% card, paid both cards off, learned a valuable lesson about both self-care and managing money, and walked off into the sunset. But it's not, because I'm as proactive as a particularly ponderous glacier.
Instead, I continued to pay interest on the debt remaining on the original card for another three years – and worse, that debt started to grow again as I got careless and started using it to spend without paying it off each month (don't you judge me – you knew I was the MoneySavingIdiot when you started reading). The minimum payment crept back up to £200/mth.
By then I was working at MSE, so I'd no excuse, but I'm nothing if not good at sticking my head in the sand. Ultimately, it was the end of the 0% rate that finally restarted my personal MoneySaving motor. I'd neglected to shift the remaining debt on the new card before the 0% period ended, and suddenly started paying 17.48% interest, resulting in minimum payments on that card jumping from £25/mth to £45/mth.
And what I did after that
To cut a long, boring story short, I did what I should have done in the first place – landed a third 0% card to which I transferred as much of the (growing) debt on the original card as I could. Then I paid off what remained on the original card, using some savings I'd miraculously accrued (thanks tax rebate!) after seeing Martin's 'pay debts off before you save' mantra.
Now on a perceptible if gentle roll, I applied for a fourth card, to which I transferred the remaining balance of the second card to (the 0% period on which had ended, remember). Unlike the others, this one came with a fee, but I figured it was worth it as the fee I paid cost less than two months of interest would on the second card.
What all this essentially meant is that I was finally paying 0% interest on all my credit card debt. A great day for MSE Kelvin – a dark one for the profit margins of credit card companies.
I'm happy to be able to tell you I'm now in a better place (although my brain still treats me to the occasional nose dive when I get careless) and I live on my own again like a big boy. While I'm still in debt, it's under control, which has undoubtedly contributed to my improved mental health, and the 0% interest on my card debt means I can crack on with reducing it, and hopefully some day soon-ish graduate from being a debt-free wannabe to debt-free.
What I learned about shifting credit card debt
I made this process way more arduous (and expensive) than it had to be through a combination of fear, ignorance and an impressive ability to run away from problems. For most, shifting credit card debt will be loooooads smoother – and it's a relatively simple (and logical) process. But here, for anyone else who is struggling with their mental health and debt – or who just struggles to be MoneySaving – is what I learned along the way:
- You're not screwed. The combination of depression and debt left me feeling like I'd dug a hole I'd never get out of, so I figured I might as well keep digging. Don't do that. For a start, you might end up buying and watching a lot of regrettable Blu-rays. No one needs to own the Underworld trilogy.
On a more serious note, I'm now paying off my credit card debt despite being far from a natural when it comes to MoneySaving, which hopefully shows you can sort things no matter how sucky the situation looks. To quote our Mental Health & Debt guide, no debt problems are unsolvable – it might not be easy or quick, but there's always a route.
- You might be more appealing than you think. I thought the size and cost of my debt, and possibly poor credit score, would mean credit card firms wouldn't want to touch me with the BT Tower. As it turned out, I shouldn't have doubted my attractiveness – I didn't have an application rejected once (although a couple of firms didn't offer me the 0% length or credit limit I applied for).
- Something's better than nothing. If you don't get the 0% period or credit limit you want, don't be perturbed. Shifting even some of your debt can make a biiiiiiiiiig difference. Like I said, I reduced the minimum payment on one card from £235/mth to £24/mth overnight, even though I couldn't transfer the whole balance.
- Play your cards right. Don't be afraid to then look around for another card to shift your remaining debt to. You can use an eligibility calculator to see what your chances of being accepted are without your credit score taking a kicking, so you've nothing to lose.
- Don't hang about. It took me more than three years to shift all my credit card debt to 0% interest, because I've the self-control of a puppy in a ball pit. While I'm obvs pleased to have done it, I'd have a lot more money to spend elsewhere now if I'd have done it over, say, three months.
If you're feeling down and want to, you can call, email, text or visit the Samaritans in person – don't worry, it's totally confidential. You can call on 116 123, text 07725 909090, email email@example.com or find out about one-on-one help. For a full list of organisations which can offer free debt counselling, see our Debt Help guide.
If you're struggling with mental health and debt issues, please download our free Mental Health & Debt guide. And for full info on how to shift existing credit or store card debt, see Balance Transfer Credit Cards.
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