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IN THE RED
Huge credit card mistake left me drowning with £12,000 debt – easy trick now helps me save without even noticing
Plus watch our video with tips on how to clear debt
A MUM-OF-TWO ran into money troubles in her younger years after making a crucial credit card mistake, leaving her with more than £12,000 worth of debt.
It took Alicia Felix almost a decade to get debt-free, but she’s now determined to instil good habits in her children to ensure they won’t make the same mistakes.
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Alicia lives in north London with her younger daughter who is 26. Her other daughter is 28.
The 49-year-old works in finance at the local authority in Hounslow, west London.
She told The Sun: “My money troubles began in the early 2000s when I ended up more than £12,000 in debt across a handful of credit cards and catalogue firms.”
One of the big issues that Alicia faced at the time was the fact that credit was so readily available.
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She said: “Back in 2003, when I was in my late 20s, I applied for one credit card and got approved. I then applied for another and got approved again.
"At the time, my credit rating was so good, I was able to take out four separate cards.”
In addition to this, she was able to open store accounts with three catalogue firms: Very, Argos and Littlewoods.
“In retrospect, I was very naïve,” said Alicia.
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“But at the time, taking out credit was almost too easy. I had funds at my disposal, and felt that this was money I was allowed to spend.”
Before long, Alicia found herself drowning in debt.
“I was not at all disciplined with money, and soon found myself struggling,” she said.
“Between 2003 and 2006, things were really maxed out.
"As I spiralled deeper into debt, it struck me what a mess I was getting into – and that things were not ok.”
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It was at this point, Alicia decided she needed to turn things around.
“I went online and searched for ‘help with debt,’” she said.
“A few companies popped up and I gave them a call. The problem was, lots of them said they couldn’t help me, as they could only help someone with debts of £20,000 or more.
"This felt very confusing, as £12,000 felt like a big amount to me.”
Alicia felt at a loss.
“I didn’t know where to go from here or who I could ask for help,” she said.
“I couldn’t ask the banks or other high-street lenders to borrow more money. But I also didn’t know what other options I had.”
To make matters worse, Alicia was going through a divorce at the time, and her work situation had become less secure.
“I was bobbing around between different jobs – including admin roles – without a dependable income, and my earnings weren’t making a dent in my debts,” she said.
“Things were pretty dire.”
Alicia found herself suffering with poor mental health due to her financial and personal situation.
I now save without even noticing
Alicia Felix
Things finally started to change for Alicia in 2009 when she made a phone call to Citizens Advice who told her about Stepchange.
Both organisations offer free debt advice.
“Stepchange helped me to consolidate my debts,” said Alicia.
“They asked me to fill out detailed income and expenditure forms, and they helped set up a ‘debt management plan.’
"This included agreeing an affordable amount that I was going to pay back each month.”
From this point, Alicia began making monthly payments of £315, and this money was distributed between her creditors which included Barclaycard, Vanquis, Very, Argos and Littlewoods.
“Having this plan in place meant I could relax a little,” said Alicia.
“My creditors could no longer deal with me directly, they had to go via Stepchange. This helped to take away some of the worry.”
At the same time, Alicia had come across a credit union called London Capital and wanted to find out more.
“In the Caribbean – where I come from – credit unions are commonplace,” she said.
“I was curious to find out how they worked in the UK. But back in 2009, there was very little information available.”
After doing some research, Alicia found her local credit union could offer low-cost saver loans and also provide financial education to help people build better habits.
Under guidance from the credit union, Alicia started saving.
While starting to save when you have debts to clear isn’t always recommended, credit unions take a slightly different stance on this.
They often encourage members to save while paying off debts in the view this teaches good financial habits – helping people build long-term savings beyond the life of the loan.
“In the beginning, I was putting away just £7 a month,” said Alicia.
“For me, this was about developing a discipline. I felt the benefit of starting to save, and this gave me something to build on.”
After a lot of hard work and patience, Alicia became totally debt-free in 2018.
She still saves with the credit union today, and now has a direct debit which channels money into her savings every month.
“This means I don’t have to think about it, and barely notice the cash leaving my account,” she said.
“I try to slot away between £50 and £150 each month.“
Over the years, Alicia has built a healthy pot of savings.
“These days I live off a combination of my salary and my savings,” she said.
“I’m in a better job and living a better life. For me it took something going drastically wrong with my finances to spur me into good habits.”
Alicia's tips to those in debt
ALICIA Felix, 49, has shared her top tips for clearing debt.
- Don’t stay quiet. You need to seek help.
Alicia said: “I know there are so many people out there with a lot of debt. You can’t tell when people are struggling.
"I remember what it felt like having £12,000 of debt, and how embarrassed I felt. But you must not stay silent. It’s important to get advice.”
- Reach out to a free debt organisation such as , or .
Alicia said: “There are groups that can help you consolidate your debts into one manageable monthly repayment.
"You need to turn to people who can guide you in making a plan.”
- Be patient.
Alicia said: “It can seem as though it will take forever to clear your debts, but with a plan in place, you will get there.”
- Build good habits.
Alicia said: “I’m keen to promote the importance of dealing with debt and building good savings habits.
"For me, joining a credit union has made a huge difference to my life.”
To find your nearest credit union, head to .
One of Alicia’s big priorities now is ensuring her daughters don’t make the same mistakes.
“I can now see the way I dealt with money and credit in my 20s was very unwise,” she said.
“Given my experiences, I want to be sure my children won’t fall into the same trap.”
Alicia is keen to share what she’s learned.
“When my older daughter wanted a car at 18, I encouraged her to save with London Capital,” said the savvy mum.
“I’ve made it my priority to pass on what I’ve learned about the importance of saving.
"Both my daughters have now developed good savings habits.”
Remember to ask for help
Her story comes as new research from Fair4All Finance reveals that nearly two in three people feel they are struggling with debt, yet 82% of the population keep their money worries to themselves.
Lauren Peel, director of consumer insights at Fair4All Finance. said: “It’s crucial that anyone struggling seeks support from credit unions and community finance providers – or from free debt advisers – rather than turning to loan sharks, illegal money lenders, or spiralling into problem debt.”
Elsewhere, new research from the Financial Conduct Authority (FCA) shows 7.4million people are struggling to pay bills and credit payments.
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“This shows the ‘crucial role’ for free debt advice,” said Steve Vaid, chief executive of the Money Advice Trust, the charity that runs National Debtline.
“No-one has to struggle along, and I would urge anyone who has fallen behind with their bills to seek free advice.”
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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