Recent graduate after a bit of advice!!

benje

Hello people

You all seem to be knowledgeable people so I thought I'd ask your advice!

Ok I finished uni in June of this year and finally started a job in October! Now I'm trying desperatly to sort my debts out accumulated from Uni.

As it stands there like this:

Barclays Current Account +£500 (this is where my wages go into)
Natwest Student Account -£1495 (Interest Free overdraft)
Natwest Credit Card -£1200 / 18.9% APR
Egg Loan -£2000 finishes in December next year (£187 month payment/12.2 APR)

Now after Tax I'm currently earning circa £1000 every month. Now I know these arent massive debts, but nonetheless there still debts :mad:

What would you guys recommend? I took the egg loan out to pay a egg card off (now destroyed), my natwest interest free overdraft gets reduced to £1000 in July.

On what I earn is it realistic to reckon I could get them all paid within a year? I dont have that many expenses (Living with parents who thankfully have said they wont charge me board until I've sorted credit cards out etc) Main exspense is petrol at the moment (£400 for Novemeber, but I got £350 back in mileage expenses)

I've applied for a HSBC interest free credit card to move my natwest CC onto, however I believe my credit history is not all that good as I currently have 5 credit cards (Only Natwest has anything on, egg card is £28 in credit!!) so I dont expect to be accepted for it.

If anyone has any ideas what would be best for me in the long run, please feel free to reply.

Regards

Ben

xlt_hunter

What I would do now is:

1. Spend the £28 on the egg card for something you need on day to day bases - ie like fuel to get it to £0.00 then close the account afterwards
2. The £350 of mileage expenses plough it stright into the Natwest card.
3. Put £75 a month to the Student account as this remains interest free - the £75 a month for 7 months will cover the £495 drop to make it -£1000 - how long does this remain interest free?
4. Close all remaining credit cards with £0.00 balances on (personnal thoughts)

As mentioned somewhere here on the boards - allways sort out the highest % first (natwest) Like you said - try to see if you can get another 0% card for 9 months then transfer the balance as its better that way than paying nearly 18.9% in interest per year (saving of £220 or £18.00 a month) this then can be used to reduced the other debts that you have.

frugglewump

benje wrote:

Barclays Current Account +£500 (this is where my wages go into)
Natwest Student Account -£1495 (Interest Free overdraft)
Natwest Credit Card -£1200 / 18.9% APR
Egg Loan -£2000 finishes in December next year (£187 month payment/12.2 APR)

The APR for student overdrafts after the interest free period can be quite high - mine is 18.9%.

I would sort the overdraft out with about £75 a month until july, then work out how much you need to put in each month so it's at £500 next july. (I'm assuming the usual limit drops).
Then throw everything spare at the natwest credit card.

You destroyed the egg card, but (if it's the same account now with £28) haven't closed it. Do you have an anniversary month for their 0% deal?

Close your other credit cards.

benje

Funny you should mention the anniversary deal thing at Egg, I must be being thick but I cant get my head around it! Does it mean I can have 6 months interest free on a balance transfer? I cant remember when I took the card out (at least 2 years ago)

Secondly, with regards to closing credit card accounts, is it simply a case of phoning them and saying I don't want the card anymore? (sorry to sound stupid!) Currently I own the following, Capital One Gold (some extortionate APR, was first credit card, originally one of those for people with a bad credit history), Marks and Spencer, Natwest, Barclaycard, and my EGG card.

Thanks again

Ben

xlt_hunter

I think its on the credit card agreement on the capital one (I have one and its sitting at 29.9% apr - I am glad that it will be cleared tomorrow) - you need to sign it on the back where is says to close the account and send it to them. Do it this way as it will be close, this is what I will be doing very soon.....

Do it by phone and they try to fob you off. (I tried)

Mike

southernscouser

Hi benje,

Basically gonna say what everyone else has!

You priority debt is the Natwest CC.

Phone up all the compnaies and ask them what balance transfer deals they can offer you. If they can't offer you anything decent close the account. Make sure what ever you do that you don't pay a fee for transfers!

If you can get any of your CC's at a lower rate you will be able to pay them off quicker.

What other expenses do you have as you only mention your loan and petrol. This means you should have £763 a month left! Have you got a mobile? Internet?

johannamse

woo....BEFORE you close any of the cc, ask them if they can offer you any special short term/medium term balance transfer rates. I am sure most of them will.

Remember the general rule, is to pay the debt with the highest IR first.

frugglewump

benje wrote:

Funny you should mention the anniversary deal thing at Egg, I must be being thick but I cant get my head around it! Does it mean I can have 6 months interest free on a balance transfer? I cant remember when I took the card out (at least 2 years ago)

Yes that's exactly what it means, but you do have to know which month you opened the card in. If you can't get Egg to tell you on the phone or find your credit agreement then you can find out by looking on your creditreport - you can get this for free from experian - there are several threads showing how to do this.

Secondly, with regards to closing credit card accounts, is it simply a case of phoning them and saying I don't want the card anymore? (sorry to sound stupid!) Currently I own the following, Capital One Gold (some extortionate APR, was first credit card, originally one of those for people with a bad credit history), Marks and Spencer, Natwest, Barclaycard, and my EGG card.

Yes. It's that simple - they will take a month or so to close just to check no transactions are pending (even if it's not been used for years).

However, it might be worth seeing if they will try to keep you. Phone them and say you want to close the card - when they ask why say you are evaluating your cards and closing down the underperforming ones (or something similar). You never know they might offer you a low % balance transfer or something.

benje

southernscouser wrote:

Hi benje,

Phone up all the compnaies and ask them what balance transfer deals they can offer you. If they can't offer you anything decent close the account.
What other expenses do you have as you only mention your loan and petrol. This means you should have £763 a month left! Have you got a mobile? Internet?

Yeah I was thinking I had a bit too much left over as well!

Other monthly outgoings are £50 phone, £22 internet and thats about it, car insurance is up in May next year, it's been mot'd last month. Also socialising, I've spent £30 this weekend and haven't been out during the week, so call it £250 (Birthday month this month as well!)

I bought a credit report tonight. It's all OK apart from missing two payments on my capital one card (Not consecutive months though) Could this be affecting my rating? I couldnt see anything about wages in there, does this not count towards your credit rating as well? Other than that I havent missed a payment on anything. Does the fact that I have 5 open credit cards count against me?

Another thing I noticed was that there isnt any mention of my current accounts on there? My barclays account has been overdrawn fro about three months in a row, does this affect anything?

One other thing is I may be going to work in Italy for six months (Coming home at the weekends) I have to pay for everything then claim it back on expenses, whats the best plan of action for this, use my current account and risk going overdrawn occasionally or a credit card? (Hopefully a 0% interest one)

Thanks for the help so far, you lot really know your stuff!

Ben

---lee---

benje wrote:

I bought a credit report tonight.

See the articles on obtaining your credit report free on the main website. I got mine online recently from both Equifax and Experian on free trials and then cancelled the service.

Another thing I noticed was that there isnt any mention of my current accounts on there? My barclays account has been overdrawn fro about three months in a row, does this affect anything?

I was also unable to find any of my bank accounts. I guess they don't count towards your credit rating, although you would think that they should - especially ones with overdrafts. Anyone else know about this?

Lee.

frugglewump

benje wrote:

Does the fact that I have 5 open credit cards count against me?

That depends on the limits. From reading these forums I believe that lenders prefer you not to have more than 60-70% of your yearly salary available as credit.

Another thing I noticed was that there isnt any mention of my current accounts on there? My barclays account has been overdrawn fro about three months in a row, does this affect anything?

Banks don't always share info with the credit agencies. On my credit report nothing at all shows from the bank my current account is with.

One other thing is I may be going to work in Italy for six months (Coming home at the weekends) I have to pay for everything then claim it back on expenses, whats the best plan of action for this, use my current account and risk going overdrawn occasionally or a credit card? (Hopefully a 0% interest one)

Why does using your current account mean you may go overdrawn? Can you find out the likely expenses and budget for them? If you can't do this then yes a 0% would be a good idea if you can get one - as long as it's 0% for purchases.

I always think of expenses that get paid back as a crap 0% savings account - I buidget for the outgoings as if I had spent it myself & whenit comes back it all goes towards the credit card debt.