Who benefits from you being in debt? Spoiler alert… it’s not you.

Many people don’t actually realise that they are in debt. Brands and companies are very good at encouraging people to part with their hard earned cash, often on things they don’t really need and often with money they don’t even have.

From credit cards to car finance, to phone contracts and buy now pay later, debt can soon become part of our everyday life, slowly eating away at our financial wellness, without us really noticing until it becomes too late.

Being in debt isn’t a mistake, it’s by design and I’m going to tell you who profits from it:

Credit card companies

Making billions from interest and fees each year. You feel dissociated from spending on credit cards as it doesn’t physically leave your bank account and there’s no cash being handed over. It’s frictionless and it’s proven that you spend more – 12-18% using this payment method.

Car finance companies

They sell you the dream of a new car but lock you into years of payments charging you more than the car is worth. Ditching car finance is always a controversial topic, people become very passionate about why it should remain in their budget. Arguments for include, “Affordable” monthly payments ,reliability, they couldn’t afford to buy that car outright.

We see it differently.

We help our community save up for an affordable car in cash with a healthy maintenance fund should (when) work is needed on the car. Car finance can dominate a family’s outgoings, with some community members admitting to paying out more on 2 financed cars than their mortgage each month.

If it’s time to free yourself from the shackles of car finance. Search car finance in the blog area of the app to learn more.

BNPL brands

Klarna market themselves as a budgeting tool (the audacity!) but profit from late fees of their customers and the retailers they partner with benefit from you spending more – a lot more! Klarna provide some helpful data in their promotional packs to retailers, stating that they can get you to increase their basket size by as much as 60%+ in some cases.

If it’s time to break up with Klarna check out this helpful TikTok

Have I done it? Have I convinced you to take back control of your money and ditch debt for good? If you need  help getting started and a step by step plan, head to the Financielle Playbook on the app home page and personalise your journey in the debt tracker for free!

We’re ready and waiting to help you.