advice needed please!

lisajordan73 · 15 September 2006 at 3:54PM

Hi,
Can anyone advise me on how to go about managing my debt more efficiently, so that I can pay it off more quickly?
My debts at present are:

MBNA credit card : 1012.19
barclaycard visa : 3,800 6.9%
Lloyds platinum : 7245 0% until Dec'06
Virgin mastercard : 1374 0% until Oct'06
O/D Lloyds : 1050 ( int approx £7.00 p.m)

Things are starting to look up for me and OH. We have struggled over the past 8yrs. My OH was out of work for six years and we were surviving on one income. Now my OH is training to be a teacher and I have just got a new job earning more money, meaning that finally we can start to get rid of these debts. My question is... What is the best way to do this? My new job means that I lose the benefit of a cheap lease car through work, and therefore, we are going to need to purchase a car in the next month, for me to get to and from work etc. So now I'm worrying that this is just adding to the debt! I know are monthly income will be much higher than previously but, should I get a loan to pay off all the debt or a loan for a smaller amount to pay for a car?
I have already transferred some credit cards to save some money but I'm worried about all the charges etc and how this will effect my creditscore etc. I'm not sure I would get the credit I needed if I applied for a low rate card or if I would even be accepted. My credit rating is good but at present we are paying the minimum payment on all cards approx £250.
So basically what I need to know is do I continue with the credit cards,get a small loan for a car, and wait til I'm settled in the new job and pay off as much as I can, or do I get a low rate loan that could be paid off in 3 years for the full amount of my debt. I feel so overwhelmed and confused by all my money worries and would really appreciate any friendly advice
thanks in advance
Lisa

Bestthingsinlifearefree · 15 September 2006 at 4:10PM

Hi LJ,

Welcome to MSE :beer:

Have a look at this link.

http://forums.moneysavingexpert.com/showthread.html?t=107280

Could you post a full SOA (Statement of affairs) i.e all incomings and outgoings.

Then MSE'ers can give you some advice.

CLAPTON · 15 September 2006 at 4:19PM

post a SoA as suggested.. be sure to include full details of your loans, i.e. what is the APR of the overdraft and the MBNA card, what will the APRs of the cards currently at 0% be when the 0% runs out.

lisajordan73 · 15 September 2006 at 5:50PM

Ok here goes!

At present monthly income is 1,400 this will increase at the end of this month to 1,800 due to OH salary. I hope to start new job by november so come dec this will increase further to approx 2,300.

SOA monthly expenditure:

Mortgage: 427.66
home ins: 32.17
council tax: 75.00
Water rates: 22.20
gas: 48.00
elec: 20.00
telewest package: 30.00
mobile: 10.00
Bank account: 10.00
O/D charges: 7.94
ISA(attached to mortgage): 100.00
childcare: 72.00
petrol: 80.00
credit cards: 250.00
mort term !!!: 14.66
crit ill policy: 35.62
gym: 30.00
food: 140.00
other: 80.00 (socialising/birthdays/clubs etc)

Total: 1375.25

Credit cards: Lloyds platinum: 7245.96 (0% til dec'06 then 15.9%) 12,000
limit

MBNA : 1012.19 (21.9%) 11,100 limit

virgin: 1374 (05 til oct'06 then 15,9% 1,500 limit

Barclaycard 3800 (6.9% for life of balance) 4,000 limit

Hope that this is all the info thats needed,and thankyou so much for your time,

Lisa

lynzpower · 15 September 2006 at 5:55PM

Lisa
How much do you pay off your cards every month

Have you cut your cards up

lynz
x

Dolly_Smith · 15 September 2006 at 5:58PM

I'm no expert but I'd try and get rid of the MBNA one first - that's a hefty interest rate you're paying there.

I also have a thing about gyms - you may be someone who uses it often in which case it's probably worth it, but when a swim at my local pool costs only £1.50 and jogging in the park is free I hate the idea of paying a gym £500 a year!! Having sex also burns up more calories than a gym session

Bestthingsinlifearefree · 15 September 2006 at 6:00PM

Hi LJ,

You need to snow ball.

Make the minimum payment on the Credit Cards and THROW ALL SPARE CASH AT THE ONE WITH THE HIGHEST INTEREST RATE;)

(which looks like the MBNA one)

Bestthingsinlifearefree · 15 September 2006 at 6:06PM

In regard to the car qu.

I am no expert but a cheap run around might be the best option.

e.g something which is reliable and gets you from A to B.

If you outgoings are £1375 and in Dec your income will be £2300.

That's 1k spare a month. So 1 months spare cash should pay for a run around motor.

Could you get a 0% ior low interest rate card buy a run around for 1K on it and then pay off the 1k ASAP.

Just ideas.

lisajordan73 · 15 September 2006 at 6:18PM

Thanks for all the advice. In response to Lynz, No I havent cut up the cards! I'm worried that an emergency might come up and i'll need quick access to money that I dont have! At present pay off the minimum which totals 250, most of this is to Lloyds plat 150 pm minimum at present.
Lisa

msmicawber · 15 September 2006 at 6:23PM

Hi Lisa,

Your SOA looks good apart from the gym and your gas bill - could you switch to a cheaper supplier? I pay £55 per month for combined gas & electricity for a 3-bedroomed semi. If you could get yours down similarly that would help.

Are you sure your current employer wouldn't let you keep on the lease for the car after you left? No harm in asking.

lisajordan73 · 15 September 2006 at 6:42PM

Hi,
Have already looked into keeping on the lease but unfortunately they wont allow it.
Have looked into changing gas/elec but i'm worried that i'll change to a cheaper provider and then they'll increase their prices! I'm with npower at present who have announced a further increase for Oct so perhaps now is the time to shift! Any recommendations?

advice needed please!

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