I was buying Visa gift cards with Afterpay to afford groceries, because the credit card payments were swallowing up everything I earned

Marie has lived in Perth for 12 years after relocating from the UK for her work. 

She’s always been employed but around COVID, she suffered a pay cut when she was moved into a lower paid position. Her husband’s work has been patchy, and being a tradesperson in a state that is particularly vulnerable to economic downturns, experienced long periods of unemployment.  

Added to this, one of their children was diagnosed with a disability at age seven, which meant paying for extensive therapy.  

They ended up using credit cards constantly.  

“It got to a point a couple of months ago where I realised we’re just drowning in debt. Every time I got paid, I could only pay minimum payments at hefty amounts on a number of credit cards. 

“One of my credit card companies wouldn’t allow me to stay on a repayment arrangement, so recommended I look at financial counselling.  

“I explained my situation to the counsellor. It’s quite tough putting all that out on the table because you feel like you’ve failed. 

“Thankfully, they put me in touch with you guys because, given you’re a charity, I wasn’t charged setup fees.” 

“Whilst I’m on a fairly good salary and had good credit rating, lenders were offering cards with very high limits and not explaining the implications.  

There’s a lot of jargon in the agreements that are difficult for even a reasonably well-educated person to understand, so you just accept the terms.  

“I know what a credit card is, what it does and know how to use it, but you don’t think about the implications of the interest, even though it is there on the statements.  

“The only lender that allowed me to start on a payment arrangement for an extended period of time was Citibank, which is where my biggest debt was, but I ended up having to use the card again. 

“Some companies were not helpful, in particular, the big banks. There was a lack of flexibility, particularly from ANZ and Westpac. 

Way Forward offered a plan 

Marie has always tracked her expenses using a spreadsheet. 

“I’ve knew what was coming out when and pay utilities bills, but the amount of credit card debt we had meant that after paying the minimum repayments, what was left over got smaller and smaller.  

“This meant there was never enough to pay for everything.” 

Marie has been working with Debra from Way Forward, who was in contact with Marie constantly to help her through the process.  

“Debra was phenomenal right from the word go. 

“We would schedule a call and talk through the budget planner, why it was important to think about all my expenses so that we could get into a point that hopefully lenders will accept an arrangement. 

“Without that preparation, through those discussions with her, I would have shortchanged myself a lot.   

“She was clear that I should be mindful of all expenses, not just monthly, but those annual expenses too so that I don’t get caught out again. 

“The meant that I wasn’t just thinking about here and now but that this is a five-year commitment, and whether, after I’ve paid off my debts, that I might get into debt again because I didn’t budget for all my expenses. 

“We don’t need to eat out all the time or go to the cinema but that we should budget to do those things infrequently to make sure that we’re allowing ourselves enough for those reasonable expenses. 

“I’ve been really impressed with Way Forward, getting me through, also emotionally. Making sure that I’d really considered every angle was fantastic.  

“I’m just so thankful and grateful that organsations such as yours exist.” 

BNPL made debt problems much worse  

“I was going into Big W buying a Visa gift card with Afterpay to buy groceries, because the credit card payments were swallowing up all their disposable income. And also paying the gift card handling fees. 

“It’s gut wrenching because I had to get a gift card to pay for the shopping. The kids knew so they didn’t want to ask for anything because they didn’t feel there’s enough money. 

Marie’s advice is simple: “Put aside enough each month for those small and unexpected things and use a separate account, just to make sure that doesn’t get touched. 

“Think carefully about using credit facilities, and the accumulation on your life. Looking back, I would have made different decisions about what we spent our money on.  

“Just making sure that, regardless of your situation, you have some sort of mechanism save and make more budget friendly choices.”