I'm going to have to get creative...

I'm writing this here because I hope to have a record of digging myself out of debt. I'm trying to be optimistic but it's a large amount compared to my income. I'm not able to work - I'm a carer - so my income is <£100 per week in total but these are my debts:

CC 1 - 1388 - 25.95%
CC 2 - 400 - around 5% for 3 months
CC 3 - 360 - 14.21%

I owe £2148... almost half my yearly income. That would be fine if I didn't struggle to cover my essentials on my income. The debt was taken out when I did have an income but circumstances have changed. I don't want to destroy my credit and I want to take responsibility for what I borrowed but I'm going to have to be creative, obviously.

I've taken some steps already. I transferred £400 to that 5% card. I tried to get a 0% one and wasn't able, even though my credit rating is very good. My income is just too low, I think. I've cancelled/suspended everything extra - Netflix, etc.

I have got some savings, £700. I've not put this towards the debt yet because I think my main chance of digging my way out will be matched betting. I've done it in the past and I know what I'm doing but I'll need some cash to make anything at all. The more I have, the more I can make.

I'm also planning to do some current account switches and chase up my warm home discount.

My plan for when I'm dept free is to do that old trick of freezing my credit cards in ice and deleting them from online accounts so I'm not able to spend without giving it some serious thought. I'm normally very careful with money and pay everything a month in advance so this is new territory for me and it's terrifying. I'm working towards being able to earn an income in the future but again, I'm having to be creative. More on that another day!

Today, I cleared £200 on CC 3 with what was left in my bank account. It doesn't make mathematical sense because of the interest rates but ideally I want to clear CC 2 and CC 3 first and then go full force on one card. It's difficult for me to keep track of multiple cards, multiple minimum payments and I'm worried I'm going to accidentally miss one and destroy my credit rating. The only reason I have so much money left in my account is because I put everything I can on my credit card with the intention of paying it off later which is obviously part of why I've ended up in this mess.

Comments

  • UncannyScot
    UncannyScot Posts: 2,070
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    Hi and Welcome :D

    Didn't want to just read n run...

    Another good source of extra income is surveys, look at Opinion Outpost, Prolific Academic, PanelBase etc. Have a look on the main MSE site for links and advice / info on improving and boosting your income.

    Good luck on your journey and look forward to reading your updates and helping and spurring you on
    BUGGRITMILLENIUMHANDANDSHRIMP I TOLD EM! - Foul Ole Ron
    It is important that we know where we come from, because if you do not know where you come from, then you do not know where you are, and if you don't know where you are, then you don't know where you are going. If you don't know where you're going, you're probably going wrong.
    R.I.P. T.P.
  • System
    System Posts: 178,077
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    Welcome and good luck. I'll be subscribing xxx

    Is there anything you can make and sell? or declutter and sell?

    I get why you want to focus on 1 card rather than 3 - but I also think it would be worth you working out about how much the interest on the 25% card would be e.g. so if you used half of your savings to reduce that down - how much would that save you?
    Is it worth trying to call your other cards and see if they will extend your balances so you can take more off the 25% card (usually comes with a cost too, so you'd have to figure out if it was worth it.)

    Surveys seem to earn people pennies quite quickly early on so definitely something to do. xxx
  • Hi and Welcome :D

    Didn't want to just read n run...

    Another good source of extra income is surveys, look at Opinion Outpost, Prolific Academic, PanelBase etc. Have a look on the main MSE site for links and advice / info on improving and boosting your income.

    Good luck on your journey and look forward to reading your updates and helping and spurring you on

    Thank you so much! I'm on Prolific Academic and have about £45 that I can cash out. I'm going to leave it there until the end of my statement month for my cards and take it all out at once. I'll take a look at the other sites you suggested too. Prolific has been the best survey site I've found by far but I really need to branch out. Do you get screened out a lot on the other sites?
    ramblehan wrote: »
    Welcome and good luck. I'll be subscribing xxx

    Is there anything you can make and sell? or declutter and sell?

    I get why you want to focus on 1 card rather than 3 - but I also think it would be worth you working out about how much the interest on the 25% card would be e.g. so if you used half of your savings to reduce that down - how much would that save you?
    Is it worth trying to call your other cards and see if they will extend your balances so you can take more off the 25% card (usually comes with a cost too, so you'd have to figure out if it was worth it.)

    Surveys seem to earn people pennies quite quickly early on so definitely something to do. xxx

    Thank you!

    I don't really have anything I can make or declutter I don't think but I'll definitely give it some thought. Most of my 'junk' is books and the postage just eats up any profit and they're not books people want locally.

    Re: the 25% card. I can't transfer anything else to the 5% card. It's not maxed out but the amount I'm allowed to balance transfer is. I'll look at whether transferring it to another card would make sense though. I have other credit cards but I just don't have a balance on them. I'm not sure what the interest rates are. They might be even worse!
  • System
    System Posts: 178,077
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    edited 15 February 2018 at 8:34PM
    If you have other accounts that already open, it would definitely be worth checking and see if there are offers / or if they are on a better rate as 25% is such a stinger.....

    To give you an idea of what you may save if you paid 50% of your savings to the 25% card:

    At £1388, paying 25% interest, paying £50 a month minimum payment, it will take you 42 months to pay off with interest of £706

    If you pay £350 out of your savings to this card, reducing your debt to £1038, paying £50 a month off, it will take you 28 months to clear the debt, with the interest costing you £335.

    I know you are obviously hoping to clear things much quicker than that, but for me I would really focus on the card with 25% interest.

    It is totally your call though!!!

    Red junk books - do you have any text books at all? They can sometimes be worth a lot of money. I had a really lucky MSE day a couple of years ago when I found a textbook - checked amazon and it was being sold for £125!!
  • HI hello, I think it looks as though you need to concentrate on ways of boosting your income. I wonder if you have thought of mystery shopping or using apps like Job Spotter or VYPR for your mobile phone. If you have some free time sites like Red Wigwam are good for finding the odd few hours work. If you look at the boost your income board you will get some idea of what other people do in their spare time.
  • beanielou
    beanielou Posts: 89,805
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    Happy shiny new diary :)
    I am a Forum Ambassador and I support the Forum Team on Mortgage Free Wannabe & Local Money Saving Scotland & Disability Money Matters. If you need any help on those boards, do let me know.Please note that Ambassadors are not moderators. Any post you spot in breach of the Forum Rules should be reported via the report button , or by emailing forumteam@moneysavingexpert.com. All views are my own & not the official line of Money Saving Expert.

    Lou~ Debt free Wanabe No 55 DF 03/14.**Credit card debt free 30/06/10~** MFW. Finally mortgage free O2/ 2021****
    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.

    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    ***Keep plodding*** Out of debt, out of danger. ***Be the difference.***
    One debt remaining. Home improvement loan.
  • savingholmes
    savingholmes Posts: 27,083
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    Just popping in to say hello....
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26% (lower post move compensated by EF) plus spent £10K+ on home improvements/emergency repairs
    2) Mortgage neutral by June 2030 AVC £8.063/£127,466 AVC target 6.32%
    3) FI Age 60 annual income target £12,500/30,000 41.66%
    Achievements: CC free since April 22. 1 year EF from Jan 24 & dedicated pot for home improvements
  • Hello everyone! :wave:

    Thank you all for commenting. It's really nice to know that people are reading but it was completely unexpected, to be honest. It's very motivating though!

    I've got a some things done over the last few days:
    • Natwest switch has been started for the 125 pound reward
    • Opened another current account elsewhere so I can do the Halifax switch
    • Made some progress on getting hold of my warm home discount. It's been sent to an old address so I should get a cheque instead.

    Re: the high interest card. It was definitely really helpful to see all the numbers out in front of me. I have some other options, I've discovered, but I'm not really sure if they work because I don't fully understand them.

    A balance transfer I understand and have done before. I have an offer for a balance transfer to my high interest card but it's at 4.9%, 0% fee, 60 month term. I also have an offer for a money transfer. It's not something I'd heard of before and I just thought it was like when you withdraw cash on a CC which is obviously a big no-no. Now I've done some checking it seems like I was wrong. It's 4.9%, 0% fee, 36 months.

    Would it be a good idea for me to get a money transfer for the amount on 25%, pay it right off and then the debt would be at 4.9%? I don't know why it feels both so complicated and so simple.

    I'm working on increasing my income too. It's not just to clear the debt either but after that's gone (for good!) having just a little extra income each week would really ease my worries. I don't want to have to worry about paying my bills and whether I can afford to get the bus to see a doctor this week. I have some things in progress on that front!

    Thank you all again for reading and offering advice. I really appreciate it. :heartpuls
  • Things are moving along well. Hopefully that continues!
    • I decided to go with the money transfer after some more research. Halifax takes payments off the highest interest part of your card first so that means the largest part of my debt will now be at 4.9%. Much better. I also paid the cash into the account I'd switched so I fulfilled the paying in requirement. Twice as useful!
    • I cashed out my Prolific Academic. 46 pound. Paid it off CC3 since it's now the highest interest.
    • Double checked I'll definitely get my bank switch bonus. It'll be in my account some time before mid-April.
    • I opened another bank account to use for another switch. That's all open now so I'll be looking at either the HSBC or Halifax one next. Halifax pays out fastest so it might be that one. One of these alone will clear CC3 with some extra.
    • I've started the process to sell a giftcard I had from an old broadband offer. It's 100 pound and I'll get 80. It's much more useful in cash because I never shop at the store.
    • I did some work this week for 20 pound that I should get in the next two weeks.
    • I also got another item refunded. It'll be refunded to CC1 automatically. It's processing but should be around 30-35 pound.

    I feel like I'm making progress which is nice. I started getting organized for matched betting again yesterday and am working on some job applications. I thought I'd dug myself a hole I couldn't get out of with this debt, to be honest but I'm feeling much more optimistic now. I'm tentative about setting a goal for when I'd like to have everything cleared off. I'm definitely one of those now now now people but I know I can't have everything the way I want it. I think a realistic goal is the end of June so I'll have the second half of the year debt free. My overly ambitious goal is mid-April. No, I've no idea how I'll pull that off either but I do like a challenge!
  • Hello and welcome :hello:

    You're making fabulous progress already!

    One more thing that might be of interest - as well as the purely survey sites, there are some that 'pay' you to scan your shopping. ShopandScan is one and I think there's at least one more out there. It takes minimal time - you just zap barcodes while putting things away, and once a week connect up the scanner to send the codes in and email receipts. I make about £10 in Ama70n or other vouchers every 5-6 weeks and have kept doing it even now I'm DF as it seems pretty good return for little effort :)


    Rosa xx
    Debt free May 2016... DFW#2 in progress
    Campervan paid off summer '21... MFW progress tbc
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