The single worst personal finance mistake: credit card debt

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May 27, 2025

The One Money Mistake That’s Quietly Wrecking Your Finances — And Making Banks Filthy Rich

You’ve probably heard the joke that the two happiest days in a boat owner’s life are the day they buy the boat… and the day they sell it. We’re not here to argue. Boats, caravans, high-end juicers — all are strong contenders for “worst use of money.” But the true, reigning, undefeated heavyweight champion of personal finance mistakes?

Credit card debt.

Not using a credit card, mind you. We love a little Amex flex now and again. No — we’re talking about running a balance. As in, carrying debt month-to-month on your card and giving your bank a 25% tip just for the privilege of borrowing your own future income. It's financial self-sabotage in stilettos.

Let’s break it down.

Credit Card Offers: The Honey Trap of 2025

Right now, if you search “best credit cards UK,” you’ll be immediately hit with deals that sound like they were dreamed up in an economic utopia.

0% interest for 24 months!
£20 cashback if you spend £250!
Balance transfers with no fees!

Moneysavingexpert.com always has an up-to-date roundup of these siren songs, and to be fair, many of the cards on offer can be found tucked into the wallets of Moneyin2 staffers. But their emphasis on switching to one of these cards in order to access a 0% deal gives the illusion that this is a long-term strategy. It’s not.

Because here’s the thing: That 0% interest period ends. Always. And when it does? The typical APR in 2025 for a standard credit card in the UK is 25.1%. Some are even higher. That’s not interest. That’s a ransom.

So let’s say you put £1,000 on your shiny new card for a weekend getaway you absolutely deserved. (And you did. This is not the point.) You make minimum payments of, say, £30 a month. That £1,000 could take over 4 years to pay off. And you’d end up shelling out an additional £550+ in interest along the way.

Congrats! You just bought your weekend away twice.

A Reverse Investment (Yes, That’s a Thing)

If investing is the art of making your money work for you, then credit card debt is the reverse. It’s your money putting on a little top hat and working for the bank.

When you carry debt at 25%, you're guaranteeing a negative return on your “investment.” Meanwhile, a decent stocks-and-shares ISA might get you 6–8% a year — if the market behaves and you don’t panic-sell at the first dip. A high-interest savings account might earn you around 4.5% in May 2025, if you’ve got the right one.

So, while you’re scrabbling to earn an extra few quid in interest here and there, your credit card company is absolutely feasting on your balance. You're not just losing money — you're losing the chance to build wealth.

But It’s Just Convenience! (Nope.)

The number one justification people give is: “It’s just easier.”

Sure. It is easy — in the same way payday loans are easy. And walking into a casino is easy. And heating your house with a bonfire made from your dining table is easy.

Convenience is not the same thing as value.

Unless you’re paying your credit card off in full every single month — ideally by direct debit, because you have better things to do than remember a due date — you’re in dangerous territory. Credit cards only benefit you if:

You’re using them to build credit,
You’re earning cashback or rewards you actually use
You’re making strategic purchases you can pay off quickly
And you’re staying well below your credit limit

If you’re not doing these things, you’re basically volunteering to be a revenue stream for your bank.

Not Losing Money = Making Money

Here’s a brain twist for you: Not losing money is just as important as making money. Possibly even more important.

Why? Because losses hurt more. And they compound. If you’re losing 25% annually on a credit card balance, that’s the equivalent of your investments needing to return over 33% just to break even.

That’s not wealth-building. That’s wealth-erasing.

In fact, if you’re carrying debt, the smartest “investment” you can make in 2025 isn’t in stocks, crypto, or fine wine. It’s paying down that debt. You’ll “earn” a 25% return on every pound you pay off — tax-free, risk-free, guaranteed. Find us a fund manager offering that, and we’ll eat our keyboard.

How to Get Out (And Stay Out)

If this all sounds painfully familiar, don’t beat yourself up. Most people get snared because the system is built for you to fall in.

But there are steps you can take:

Stop spending on your cards immediately.
Use a balance transfer offer, but only if you’re sure you can pay it off before the 0% period ends. Treat that deadline like your life depends on it.
Prioritise high-interest debt first. Pay minimums on the others, throw everything else at the card with the worst rate.
Automate payments so you never miss one.
Get mad. Seriously. Channel that righteous financial rage into motivation to never give another penny to Barclays’ interest income again.

Bottom Line

Buying a boat might be flashy. Going all-in on Dogecoin in 2021 was reckless. But nothing — nothing — quietly sabotages your financial life like carrying credit card debt.

You’re not just paying for the stuff you bought. You’re paying for the privilege of having bought it badly. And the credit card companies are laughing all the way to, well, themselves.

Cut them off. Pay them down. And invest in you — the only asset that won’t charge you 25% APR for the pleasure..

The Moneyin2 Guide to Wealth

The Moneyin2 Guide to Wealth will get you the biggest return on your savings by maximising cash matches from your employer, free cash from the government, and shielding your investment gains from tax. It takes you step-by-step through the world of pensions, SIPPs, ISAs and ETFs — all in plain English.

And for dessert …

Brooklyn Beckham and wife Nicola Peltz secured a lucrative six-figure deal as the new faces of luxury brand Moncler.
"I'm A Celebrity"alum Jack Maynard tied the knot with heiress Lily Mackie at the opulent Château Saint-Martin & Spa in Vence, France.
UK Inflation hits new high not seen since January 2024. (Soaring energy and water bills are largely to blame.)
Hailey Bieber's Skincare Brand 'Rhode' Valued Over $1 Billion

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