In this episode of WEtv, Wealth Enhancers CEO Sarah Riegelhuth and Financial Coach Rebecca Pritchard are talking toxic debt and the minefield that is credit cards.


This is an area that is completely normalised by Gen Y but realistically is really misunderstood.


We’re kinda scared but let’s dive in.

Rebecca Pritchard: I don’t spend money on clothes. That’s just not my thing. But I really enjoy looking after my skin.


Sarah Riegelhuth: Well, you do have nice skin.


RP: I know! I’ve spent a lot of money looking after it in the last couple of years through a little bit of credit card use. I reckon I’ve spent a couple of thousand dollars on microdermabrasions, and IPL, and have you done LED light treatments?


SR: Yes, it’s so good.


RP: I don’t know why it’s a hundred bucks though! And vitamin C cream and E oil and all kinds of things.


SR: Serums, they’re like $100 more, or more, each. And apparently you need A, B, C, D! You need all the serums. Okay, so you got married, you spent all your money making your skin look nice which was potentially an investment in those photos.


serums are sending me into credit card debt


RP: Yep.


SR: And how did you do it? You used your credit card, didn’t you!


RP: Yep. A couple of years ago I found myself with just the credit card that was sitting in my back pocket. I wasn’t using it very often and then I found that there was sort of these big lumpy expenditure (MY FACE!), that I was having to budget around each week. I was struggling a little bit so I would put it on the credit card and I would pay it back, and I was like,

“Okay I’ve got four weeks to pay it off. I’ll pay a hundred dollars a week – because that’s how much I was spending!”

And that was fine. It was fine for like six months and then… then they’d sell me products and so it went from a couple of hundred dollars a session to like a couple of hundred dollars plus the extra serum and the extra whatever and suddenly I was getting myself outside of my cycle and I couldn’t pay it off in time and I started paying interest.


SR: And that was when you were avoiding me.


RP: I was actively avoiding Sarah’s calls because she was like,

“We need to have a coaching session, we need to have a coaching session,”

and I was like,

“Oh, but I just need to sort out my debt situation before I see her.”

And then, I was like,

“She won’t look back, she won’t look at the history, she won’t notice that it was ever there in the first place!


SR: And then we sat down and I was like,

“Where did this debt come from!?”

We’d been working together for quite some time and all of a sudden you had a credit card again!


RP: Yeah, and it was like, Where did this come from and why are you paying interest on this? I had money. The other question you asked me was,

“What does Eric think about this?”

And I had to say,

“Um, I’m pretty sure he doesn’t know about it.”

I mean the card was in joint names so he could have found out if he really wanted to. But I knew he didn’t know.


SR: He wasn’t looking around for your sneaky debt!


RP: Right, he was not assuming that I’m hiding things in the background. He’s just noticing how fabulous my face looks everyday! And it was so shit. It was so shit talking to you and going,

“Yep, my name is Rebecca and I have toxic debt.”

And then you told me I had to pay it off and so I had to then tell Eric that I needed to take $2000 out of our buffer account to pay off this debt that I had been hiding. And it was awful. It still makes me feel sick when I think about that. 


my name is rebecca and I have toxic debt


SR: You’re not alone. And I think if it’s hard for us and we’re financial professionals and we fuck up with our credit cards, it’s hard for everybody. I mean, I haven’t had a credit card for quite a long time but yeah back in my heyday, I totally racked up so much credit card debt and it was so bloody stressful.


RP: I remember reading in your book, before I joined the WE team, about when you were traveling?


SR: Yes, I went traveling when I was 18 and I got a credit card because you know, I’m going overseas and incase of an emergency and it’s the safe thing to do. And really, having that access to credit meant that I didn’t save as much for the trip and then while I was there, I had like an extra $3000 or whatever it was so that I could spend more. It definitely wasn’t emergencies, let’s just say! Shopping in Paris and eating out in London! And I came back to Australia with like $3000 worth of credit card debt. I remember lying awake in this camp ground out of Venice and I was just lying in my bed thinking,

“Oh my god, when I get back to Australia I’m going to be so sad.”

I could pretend throughout the day that it wasn’t there but I’d wake up in the middle of the night being so stressed. But I do think that because of how normal it is, not everyone gets stressed.


so sad - toxic debts and credit cards


RP: No!


SR: That’s the weird thing for me. I had this member that I was working with years ago who had heaps of credit card debt and every time we sat down we would make this plan for her to reduce it, and then we’d get back together the next time and like, if anything it had just gotten worse!  After about a year of working with her I just thought,

“I am a failure as a financial advisor.”

We’d have these super serious conversations, and I ended up saying to her,

“Okay, I think I’m failing, can you please tell me what I can do better to help you get out of debt?”

And she was like,

“Well, the honest truth is, the moment I leave your office I just don’t care.”

And I was like,


Because I’d been assuming that she was like me and she was lying awake at night stressing about it but she was like, nah, literally only time I think about it is when I’m in your office. And I think that’s because it’s so normal these days. Everyone has credit cards and credit card debts.

Everyone is throwing down plastic to pay for dinner or whatever, so it just seems like that’s the normal thing to do.


RP: And  you get the opposite of it now where you go out for dinner and someone says,

“I don’t have a credit card,”

and everyone’s like,



SR: I know!


RP: I have members, you know, it’s really common, they say,

“Oh, I’ve only got $25000 of credit card debt,”


“I’ve only got a $15000 personal loan, I’ve only got a $50000 car loan.”

That’s a big loan.


SR: That’s a big only. I just think it is tough. I think we all earn pretty good money and we’re struggling with it, I can’t even imagine what it’s like for people who are living on low incomes. But it has just become totally normal and that’s because of being like 18-years-old and getting that first credit card and you can finance everything these days: cars, teeth, boobs! My friends finance their boob jobs, it’s insane.

And then you’ve got all the ’48 months interest free’ for furniture and it’s super tempting to just do it. I also think there’s a bit of a rhetoric around I can manage it, I can game the system for my benefit.


RP: Oh yeah, I’m can buy this TV and I only have to pay $25 a week for the next two years.


SR: Yeah, and I’ll be the one that won’t stuff it up and have to backpay all the interest, but, inevitably, you know-


RP: Honestly I think I had a credit card for five years before I paid a single dollar of interest and I thought that I was so awesome. But they just stick in there and they hang in there and eventually, eventually you trip up and you have to fork it out.


SR: Not only that but you spend more. When I was using credit cards, I started using my credit card ‘properly’ but you know, I was just spending more.

Rather having my personal spending allocation of whatever it is every week and just having to stick to that, I was trying to use my credit card to flow through the expenses and get all the points, but I wasn’t able to stick to my budget. So even though I could still pay it off at the end of the month, I was spending like 30% more than what I would have been spending.


RP: Well that’s because your credit card doesn’t tell you when you’ve hit your ceiling! It doesn’t say,

“Oh, Sarah, you’ve spent all your personal spending this week, don’t spend any more!”


SR: I know, and even with tap and pay, it’s hard. But, so my personal spending is $250 a week, admittedly I do have more expenses that flow through the business like some of my travel and things are covered there, but because I only get that $250 and that’s all I have, the thing will actually just decline if I get to that point. Which is a good thing!

Actually, one of the other things that happened to me when I was overseas was, they allowed me to overdraw my account. So I had my credit card that I racked up to $3000 and then one day a Visa debit transaction just went through on my card. So I’d also got like $500 or $1000 of like overdrawn account and that was even worse because I had to pay a fee every time that I got it overdrawn, like a flat fee of $10 or $30 or something like that, I can’t remember. And then I had to pay interest and they have a really high rate of interest when you’re overdrawn, so, I mean, that was really, really annoying!



RP: GRS fail!


SR: That was a total GRS fail. Actually I found my 18-year-old diary a few years ago-


RP: Lots of insights?


SR: Lots of insights. I was such a blamer of the world. I read this diary entry and it was like,

“I’m in so much debt because the bank, they let me overdraw my account and poor me,”

I was such a bloody victim. It was sickening. But I was only 18. I had to learn my lesson. But I came back just blaming the world for my debt and I think, it’s easy to do. And I do still now think that credit card marketing and this easy access to credit is setting us up for failure.


RP: Oh, massively.


SR: I mean the first step is definitely ownership. Don’t be a victim like I was and just own it. Because I knew what I was doing, I just didn’t want to admit it to myself.

But we are living in a time where it’s super easy to get into debt. It’s tough to avoid it.


RP: I don’t know if I’m allow to say this but the banks are assholes.


toxic debt and credit cards - the banks are assholes


SR: Yeah.


RP: They are really going after you. Like you said, the system’s set up you know to screw you over. I reckon I was 15 or 16 and I was depositing money from my first job at the bank and they were like,

“Hey Rebecca, you seem like you’re a really good saver, would you like a credit card?”

Thank God I said no.


SR: And the marketing makes you think that when you’re grown up, an adult, that’s what you do.


RP: A successful person has a credit card. A successful person has a black or a platinum or-


SR: Totally, all the marketing is like the Platinum card, the black card, they’ve got one that’s made of steel and people are like,

“Look how fancy I am, I’ve got my steel card!”

and it’s like,

“Oh, look how fancy I am, I’ve got my own money.”


RP: I’ve just got my pile of cash that I’m just gonna pay for everything with.


SR: I mean, maybe not cash, but like,I remember I had this super wealthy surgeon who was like,

“Oh, I have to have credit card, that’s how I live,”

and he was making so much money but he was just spending it all and I’m like,

“How about if you just actually had your own money? Wouldn’t that be better than having a credit card?”

And he was like,

“Oh yeah, that does seem cooler.”


RP: Have you ever had to try and break up with the bank though? Because I know I’ve done it and they did not go down without a fight.


SR: It’s tough, they do everything to keep you there. I remember I had canceled a card once and I’d moved house and I forgot to cancel one, I think it was like a gym membership, and they just re open your credit card. So like a year later I got this letter from a debt collection agency who had tracked me down because $300 had built up on my credit card over a year. 

I rang the bank and they’re like, well, if you have like automatic direct debits set up, they just reopen it to fund the thing, and I was like, this is an absolute joke. The system is designed for people to fail.


toxic debt and credit cards the system is designed for people to fail


RP: When I tried to cancel my Amex after my epiphany with you last year, I’d already chopped up my card because obviously I could not be trusted with it, but I needed the card number for BPAY.  I called them and I spent like 15 minutes on the phone trying to identify myself and they refused to give me my card number over the phone and the only way they would give it to me was to send me a new card.


SR: Yeah.


RP: This is me calling Amex saying I cut up my card because I can’t be trusted with it and they say, here, we’ll send you a new one! It’s so frustrating. I think people have relationship breakdowns that are easier than breaking up with a bank. I’ve had members tell me,

“Oh Rebecca, I tried to cancel my card but after 10 minutes they just, they convinced me that they would do this and that and they put me on a lower interest rate now. So I’ve decided I’m just gonna keep it and I’ll see how it go for a little bit longer.”


SR: All the benefits and all that… I think we have to be honest with ourselves that the credit card companies are making more money out of us otherwise they wouldn’t have to make those enticing benefits like points and access to lounges and all these benefits that you get that’s just crap.


RP: I think even with balance transfers these days, if the credit card companies can afford to give you two years interest-free and they’re still in business like how much money are they making and how many people are not clearing their debt by the end of the balance transfer period?


SR: Well, they know the game. Once they get you in they’ve got two years to get you spending. That’s a big trap people fall into as well, actually. Like, do the balance transfer but then don’t cancel the old card. So if you are going to do it, and it can work for sure,  make sure you cancel the old card otherwise you’ve ended up with two and you’ve just doubled your potential debt.


RP: That’s a danger zone!


To watch even more of this conversation on toxic debt and credit cards (and good debt and how to get OUT of debt), check out the whole episode of WEtv on our Youtube channel.





Disclaimer: all information contained within this article is of a general nature. Do not rely upon it when making financial decisions. Please consult a professional financial advisor or planner (like us!) before acting.