Credit card debt sleeplessness

MoneyWorryBunny

Hi, this is my first time posting. I'm actually pretty new to this whole site but everyone seems so kind and helpful I'm hoping for any advice!

My situation is that my debts have been creeping up and it's now causing me a lot of anxiety. The main reason I'm in this position is because my OH's work has dried up. At the moment, whilst he's applying for other jobs we're living off my wage. Not much fun. Anyway, reality hit as burying our heads any longer in the sand was going to cause more problems.

Last week, we did our SOA and I think with some pretty frugal living we’ll be okay, but it’s my credit cards that are driving me insane. I’m adamant that there’s going to be no more spending on them unless it’s a matter of life and death, but the interest is just haemorrhaging much needed money and I’m causing myself to be demented from thinking about it all the time (as you can see from the time of posting, I’m awake again).

Anyway, this is how they’re looking:

Virgin CC – Balance £959.96 (limit £5,800) APR 17.9%

Natwest CC – Balance £2,133.75 (limit £5,800) APR 19.9%

Lloyds TSB - Balance £3,640.33 (limit £7,900) APR 14.9%

Until this week I also stupidly had two other cards, Egg & Barclaycard sat around with £0 on, until I read that this could adversely affect your credit rating. So I’ve cancelled the Egg one (at the same time asking if they could offer me a good balance transfer deal – they couldn’t). And I was about to cancel the Barclaycard but then I wondered about transferring a balance to that. The limit is only £3,750 though, but I could transfer the most expensive Natwest balance?!

Any advice would be gratefully received!

GeorgeUK

I have heard that virgin and LTSB both offer fairly regular Balance transfer deals for existing customers. If you have the barclaycard at a nil balance, phone and ask what the APR is and check if there are any BT options available at the same time. Hopefully you'll be able to transfer some of the money. Have you tried getting another 0% card?

Sue-UU

Hi and a very warm welcome to MSE.

Well, you've made the first step to get yourselves back to where you want to be asap. I'd certainly try transferring the Natwest balance to Barclays, you've nothing to lose by doing so. Do try not to worry. I know you might think that what you owe is a terrific amount and in some ways it is, especially now that your OH's work has ceased. However, compared with so many of us, it isn't too bad at all and, so long as you're very careful from now on and get rid of (cut up) any cards that you don't need you should be able to get out of debt relatively soon. If your OH isn't out of work for too long, with both of you earning again it shouldn't take too long to turn your life around and get your debts paid.

Please, try not to worry too much any more as it won't help one little bit and it certainly won't get you to the winning post faster! Ask yourself what's the worse that can happen and get things into perspective, you'll start to relax more then - no point in not doing so! You need your sleep too, all of us in the same situation do, that way we can think more clearly and see things for what they are - not what we imagine they will be, if...if...if...!

How about putting your SOA on here and we'll see if there are any ways that we can possibly help you even more with. Sometimes we get a bit too wrapped up in our own finances and can't always see things properly and often others outside of the problem can find other ways/areas to trim figures down even more. Meanwhile, if you haven't already done so, you may like to watch this video of Martin's on the Forum http://www.moneysavingexpert.com/loans/debt-help-plan It's so much easier and calming to listen to him spelling it all out and calming us all. Have a watch, it'll be 23 minutes very well spent, I promise you.

All best wishes and please look ahead to when this will all be way in the distance. Life will get so much better, you just need lots of patience and... little worrying, it's never worth it and will only make you ill. So take some deep breaths, let go of of the stress and look ahead to better times. There are so many others of us here just like you, you're never alone on MSE.!

All the very best to you both.

Sue

MYLITTLESISTERLOLA

MoneyWorryBunny wrote: »

Virgin CC – Balance £959.96 (limit £5,800) APR 17.9%

Natwest CC – Balance £2,133.75 (limit £5,800) APR 19.9%

Lloyds TSB - Balance £3,640.33 (limit £7,900) APR 14.9%

Any advice would be gratefully received!

Call your credit card companies to see what they would offer as a balance transfer
say card 2 worked out the cheapest transfer bal 2 onto card 3 then when card 2 shows as clear transfer all the balances to card 2 to get the best rate
2 things to be mindful of, the balance transfer fees and the length of the balance transfer deal

Regards
MLSL

Karmacat

Morning MWB

Just wanting to support what the other two have said - do your Statement Of Affairs, and check about balance transfer offers, preferably on the remaining empty card, or a new one if not.

Best of luck - you've done the hard post now, so keep posting.

MoneyWorryBunny

Thanks everyone. I try not to worry but I just seem to be thinking about it all the time. I'm trying to turn it into positive thought around where I can save money, how I can not spend etc, but sometimes the pressure just gets too much, especially when OH gets so down about his situation and feels a burden. Not to mention the grief we get from both sets of our parents (and we’re not teenagers!).

My SOA is as such:

Monthly income:

My salary - £1776.62 (getting a pay rise this month so this’ll go up – yay)

Monthly outgoings:

Mortgage - £483.97
AOL - £23.21
British Gas Homecare - £21.97 (got this because both boiler and fire needed attention this year)
Council Tax - £83.00
Dentist - £11.99
Buildings/contents ins - £54.95
Water rates - £24.60
E-on - £88.00 (this is high because I wasn’t paying enough, it’s back in the black now but will be high through winter)
Mobile phone - £27.50
BT line rental - £37.50 (this seems high for just line – will have to check it)
Food and drink - £200.00
Magazines - £21.19 (I should probably reduce/get rid of this L)
TV Licence - £11.95
Pet insurance - £20.88 (I have two cats)
Pet stuff incl food and vets - £30.00
Car tax - £10.00
Petrol - £30.00 (I manage to keep this pretty low)
Car insurance - £43.29 (this is due for renewal this month and I’ll be reducing it to 3rd party because car is so old!)
Car service, MOT & repairs - £35.00
Student Loan repayments - £96.18
Loan repayments - £145.70 Balance £4,953.80 APR 8.0% Length of term 48 months, 35 months to go
Opticians -£9.00

Total £1509.88

What I haven’t included here is OH’s outgoings, which are £121.50 a month, which I might have to help out with….

Jesthar

Hi Bunny, and welcome!

You might find it helpful to redo your SOA using this handy little tool, as it will help you by making a whole bunch of useful calculations to show you how much money is available every month for paying off any debts etc.:

http://www.makesenseofcards.com/soacalc.html

If you use the 'MSE' button in the format section near the bottom, you can even copy and paste it straight in here so we can take the extra info into account when making suggestions.

Anyway, let's have a look:

MoneyWorryBunny wrote: »

My SOA is as such:

Monthly income:

My salary - £1776.62 (getting a pay rise this month so this’ll go up – yay)

Monthly outgoings:

Mortgage - £483.97
AOL - £23.21 :eek: You can definitely do better than Almost On Line/AOHell (insert other varient here ) for internet!
British Gas Homecare - £21.97 (got this because both boiler and fire needed attention this year)
Council Tax - £83.00
Dentist - £11.99
Buildings/contents ins - £54.95 This seems a bit high, try shopping around for a cheaper deal
Water rates - £24.60 How many people is this for? It looks a bit high for just two
E-on - £88.00 (this is high because I wasn’t paying enough, it’s back in the black now but will be high through winter) Check your useage levels and switch supplier if you can - I'm sure you can get a better deal than this!
Mobile phone - £27.50 You might want to look at reducing your plan or going PAYG if possible
BT line rental - £37.50 (this seems high for just line – will have to check it) :eek: Trust me, this IS very high for just line rental unless this is a quarterly figure. You definitely need to check what you're signed up for!
Food and drink - £200.00 How many people is this for? If it's just two, you can definitely bring this down by quite a bit very easily Check the Old Style Moneysaving section of the forum for plenty of ideas!
Magazines - £21.19 (I should probably reduce/get rid of this L) Unfortunately true - well done for admitting it! You may find you can afford one now and again.
TV Licence - £11.95
Pet insurance - £20.88 (I have two cats)
Pet stuff incl food and vets - £30.00
Car tax - £10.00
Petrol - £30.00 (I manage to keep this pretty low) Very good!
Car insurance - £43.29 (this is due for renewal this month and I’ll be reducing it to 3rd party because car is so old!) Also a good idea - well done!
Car service, MOT & repairs - £35.00 Each month? Are you sure?
Student Loan repayments - £96.18
Loan repayments - £145.70 Balance £4,953.80 APR 8.0% Length of term 48 months, 35 months to go
Opticians -£9.00

Total £1509.88

What I haven’t included here is OH’s outgoings, which are £121.50 a month, which I might have to help out with….

Well, the good news is you already seem to have a slight surplus, which can definitely be increased with a little effort. You also have a very good attitude to all this, and aren't afraid of tackling it, so I think you stand a very good chance of working all this out, especially with the pay rise coming soon.

~Jes

MoneyWorryBunny

Thanks Jesthar.

I'll have a look at the MSE tool and see what it comes up with.

Just to answer some of your suggestions:

AOL - currently tied in - I took it out with them for the free laptop deal as I needed a new computer....
Buildings/contents - I'll have a search round for other deals.
Water rates - this is for two of us, it's a fixed thing we're not on a meter or anything, so I'm not sure what else I can do.
E-on - this is just artificially high at the moment because when I switched to them they made the payments so low weren't covering usage. I think it's a decent enough deal though, it just needs to balance out.
BT line rental - duh - I think this is quarterly - my mistake! (Ooh more money for me (and the CCs)...!
Food and drink - I'm going to check out the Old Style board to see how I can get it down further - because I think this is one of my areas of weakness where I can go over budget. Not been doing too bad recently though.
Magazines - I shall bite the bullet and say good bye.
Car service/MOT and repairs - this was me trying not to get caught out by unexpected repairs that have previously gone on the credit card My car is 10 years old now so these are getting more regular

MoneyWorryBunny

Thanks George,

I haven't tried getting another O% card yet. Because I've done this a couple of times before, I was getting concerned about ending up with loads of cards (e.g. I've only just cancelled Egg) and wondered if people had alternative suggestions. I haven't tried the shifting balances around between existing cards yet, so that could be the way to go.

Numpty_Monkey

And remember if you switch insurance or utlities to go through a cashback site,
Some of the loyalty cards have options for using your points for magazine subscritions

Jesthar

Hi Bunny,

Glald to help! Just a few thoughts on your comments:

MoneyWorryBunny wrote: »

AOL - currently tied in - I took it out with them for the free laptop deal as I needed a new computer.... Hmm, OK - make a note of the 'freedom' date and switch ASAP after! :rotfl:

Buildings/contents - I'll have a search round for other deals. Excellent!

Water rates - this is for two of us, it's a fixed thing we're not on a meter or anything, so I'm not sure what else I can do. If you don't use large amounts of water, you should check out if you can apply to have a meter fitted. I'm single, living alone, and my whole metered bill for last year averaged out at around £10 a month (including the standing charges, which made up the greatest part of it!).

E-on - this is just artificially high at the moment because when I switched to them they made the payments so low weren't covering usage. I think it's a decent enough deal though, it just needs to balance out. OK, but once you have cleared your backlog to them you should calculate your annual consumption and compare prices anyway just in case. I'm just about to save around £125 a year by switching from British Gas, and I haven't seen e-on in any of the best deals for me... Oh, and also look at ways of saving energy - I'm pathalogical about turning things off when not needed!

BT line rental - duh - I think this is quarterly - my mistake! (Ooh more money for me (and the CCs)...!Fabulous!

Food and drink - I'm going to check out the Old Style board to see how I can get it down further - because I think this is one of my areas of weakness where I can go over budget. Not been doing too bad recently though. Trust me, you can make some fantastic savings here! As I said, I'm single and on my own, but I only spent around £50 on groceries last month (worst case = around £80), and I eat VERY well and don't buy value brands. My primary weapon is batch cooking - I can make 8 good portions of spag bol/stew in my slow cooker for about £5 and freeze the spares (home-made ready meals! ), and the meat from a slow-cooked joint of lamb shoulder or brisket will last me all week - again, costs £5 (or less on offer - my last three joints have cost avout £3 each! ), plus the cost of veg and tatties. Try signing uo to the Grocery Challenge - I never have, but it looks like a great motivator!

Magazines - I shall bite the bullet and say good bye. Well done - don't forget to allow yourself an occasional treat from time to time, but you may find you wind up not missing them!

Car service/MOT and repairs - this was me trying not to get caught out by unexpected repairs that have previously gone on the credit card My car is 10 years old now so these are getting more regular Ahh, right. I know this sounds like a good idea, but I suspect you'd actually be better off paying the extra money off your cards and saving yourself the interest in the short term. Then, if you have to use the cards to pay for repairs, you've still saved yourself extra interest in the interim (and unless you can find a savings account that pays more than the interest rate on your highest card, paying off your CCs is definitely the best way to 'save'!), AND you'll get a month interest free (I think) on the any new bills you have to put on the card

If you can do a balance transfer on any of your CCs to a lower interest rate (especially a 0%-er), particularly for life of balance, that would be very good - just remember to cut up that card and NEVER spend on it!

If you can also get a 0% interest card for new spending, that would be good as a short term help, but don't forget you'll have to start paying interest after the introductary period has finished, so it would be best to use it as little as possible for unavoidable expenses you can't fit into your budget.

When it comes to paying off CCs, pay the minimum amount on all your cards every month, then throw all spare cash you have in a month at the one with the highest interest rate until you have paid it off (rther than paying extra off all of them). Then move on to the one with the next highest interest rate, and the next etc., thus saving yourself the maximum amount of interest possible. This is called 'snowballing, and there is a handy calculator for helping you work all this out here:

http://www.whatsthecost.com/snowball.aspx

And, as numpty says, if you do switch utilities remember to go through a cashback site and get paid for the pleasure of saving money!

~Jes