John and Vicky stared at each other across the table as they realised the financial devastation they had created between them.

How could they not have been aware of the depth of debt and financial mess they were in—and this all after fifteen years of happy marriage?

How could two people just on average incomes have racked up £75,000 of debt between them—this debt being on top of their mortgage—without either of them knowing the full picture of the other’s debts?

As I slowly sipped my coffee, giving them a few moments to come to terms with the reality of their dire situation, I reflected on just how many other times I’d seen a similar picture during the last few months and years.

I thought about the story of Mike—a self-employed plumber who had used his personal credit card to cover his business expenses and running costs for those months there wasn’t quite enough work or cash coming in.

The problem was that he was using his credit card to finance his personal life as well. As the months went on, the debts just kept on increasing and more and more of his income was disappearing in servicing his interest payments.

He managed from month to month as he was able to use one card to pay off the other but the bills kept increasing—even with the so-called interest-free offers and balance transfers. The truth is these are not free at all as they charge you 3% to 5% upfront, so they actually collect the interest on the first day.

It didn’t take too long before, even in the busy months, Mike was barely earning enough to pay his monthly interest charges—never mind his living expenses.

Does this sound like someone you know—maybe intimately? Could it even be you?

Then there was Sue, a young maths teacher who had a great social life and loved to spend her long holidays in exotic locations.

Unfortunately she was trying to match the lifestyle of some of her friends who were earning two or three times her salary.

She managed for a while because every other month she’d receive an offer for a new low-interest credit card. Since these companies felt she had a secure job, they were happy to shower her with special offers and credit advances.

She thought as a maths teacher that she was safe with numbers and she became really good at juggling the different balance transfers and interest rates. But there comes a time when the unbelievable deals are proven to be just that—unbelievable.

18. To Beat the System You Need to Understand It