Floozie's Lightbulb Diary

Intergalactic_Floozie

Hiya Nats, yeh I knew about the 90% maximum BT.

So, I've been playing around with figures on what's the cost and I am estimating that all my cards are around 16.9% so it doesn't really matter where I shift the £2k from Post Office.

So, shall I move it to MBNA and make my balance £7700, or move it to my Tesco card and make that £750 (ish)

mooomin

Intergalactic_Floozie wrote: »

Hiya Nats, yeh I knew about the 90% maximum BT.

So, I've been playing around with figures on what's the cost and I am estimating that all my cards are around 16.9% so it doesn't really matter where I shift the £2k from Post Office.

So, shall I move it to MBNA and make my balance £7700, or move it to my Tesco card and make that £750 (ish)

If it was me, I would move it from the Tesco card, leaving you approximately £750 to pay off. Fling your resources at that one to get the sense of achievement of paying it off and closing it down. It will also then show as a good settled debt on your credit file.

Next, attack the MBNA as much as possible, as the larger balance means you'll accrue more interest. Again, making good payments to it should help your credit rating. You could do all this while making minimum payment to the Post Office one while it's on interest free.

What do you want to do? It's your shiny new card after all!

natsplatnat

I agree with FF - the sense of achievement in getting rid of the balance on the Tesco card will be great!

Intergalactic_Floozie

I think that is a very good idea! That is indeed what I shall do!

MrBG

Intergalactic_Floozie wrote: »

I tend to shred all my statements as soon as I have paid them, and the next lot aren't due in yet.

Not a good idea to shred your statements as soon as they are paid - for starters everything you buy with your cards are guaranteed by the credit card company, so if anything goes wrong, you'll need some form of evidence to back up any claim you may have. Also as proof of purchase if you lose something or have it stolen.

Also, as you're obviously working hard to reduce your debt, think how good it'll be looking back in a year's time and seeing how much you've saved.

I keep my statements for five years before shredding.

Intergalactic_Floozie

Right I have made a decision (can you tell this is all I have been thinking about!!!). I am going to balance transfer the £2000 onto the MBNA card after all.

I found 1st December's statement and it's flaming downright scary! Last month I had paid £205 and the interest added was £194.10! Then it asks me for £199.10 for December's payment and says the interest added will be £203.07 - so the payment doesn't even cover the interest!!!

However I am going to leave it until the next statement comes (early January). The reason for this is I have paid 1st December's statement already (£199).

So when 1st January's statement comes I can balance transfer the money in, which will act as January's payment (is that right?)

Sometime in January I will then get a statement from Post Office for 2.5% (so, in the region of £52.50).

I would have been paying MBNA in the region of £200, so the other £148 I will put into a savings account just to give myself a bit of a buffer (also it's DS2's 6th birthday in February). I don't have any emergency money put away which is why I spend so much on credit cards, so I'd really like some money to fall back on if the need be.

And then I shall continue to chuck everything at the MBNA credit card (I have just done this on snowball calculator and paying minimum payments means I will be debt free in 40 months) but I know from spending a month on the PAD thread that even tiny amounts make a difference.

I'm also going to try and get in as much overtime as I can (which pays roughly after tax £8.80 per hour at time and half, and £11.50 at double time).

There - I am glad I have made a decision now!

PS - and if I can find an extra £30 to round my debt payments up to £600 a month I can have it paid off in 37 months, so knocking three months off.

Intergalactic_Floozie

Yay, I have just checked my HSBC internet banking and the interest I paid in December was £21 exactly (it had been £23 in November) and now they only want £11.53 for January!!!

natsplatnat

Yay! well done Floozie!!

Intergalactic_Floozie

Right this bloody MBNA credit card and balance and whopping interest rate is causing me sleepless nights.

I've done the snowball calculator and if I carry on paying £570 per month on debt repayments I can get it all paid off in 40 months. You could say I have been used to paying them so shouldn't tell a difference but the truth is I have only been paying £120 of it since November (for six months), and £60 of it since December (for three months) so it's not a long term thing.

I'm really worried that I wont be able to keep up this level of repayments.

I wondered how much a loan would cost to repay and what rate I would get offered. I went to Egg and did something where you don't actually apply for a loan, but they assess you and offer you a rate and they offered 21.9%, and I actually applied for one with Natwest and they offered me 13.9%. This is paying £174 over 60 months.

SOA:
My wage: 1080
Partner's Wage: 1718
Child Benefit: 125.20
Child Tax Credits 40.52
Total Income: 2963.72

Money out:
Gas 100.00
Electric 48.00
Water 34.20
TV Licence 11.99
Virgin (phone/broadband) 43.00
Sky (TV) 50.00
Council 80.00

Mortgage 464.00
House Insurance 19.15
Life Insurance 21.34

Mobile (3) - me 30.00 (I can get out of this in June 2009 – I tried to reduce it but they wont let me)
Mobile (3) - DH 35.00
Mobile (3) - Dh's old one. 28.00 (we got this for a free Nintendo wii but he decided he didn’t like the phone after a few months so he got another contract with a blackberry – I can get out of this contract in February 2009 – I tried to reduce this but they wont let me. In the meantime eldest son has been using it)
My car insurance 34.60
Website subscription. 9.90 (weight loss resources – an online calorie counter, weight loss support group)

A&L Loan (conservatory) 135.16 (paid off in March 2010) 6.9%
A&L Loan (my car) 236.00 (paid off in October 2011) 7.9%
Natwest Loan 137.90 (paid off in December 2011) 10.9%

MBNA CC 200.00 (£9700 @ ? % - looks like 24.9% from statement)
Tesco CC 83.00 (2718 @ 16.9%)
Tesco CC 75.00 (2500 @ 16.9%)
HSBC CC 30.00 (950 @ 16.9%)

HSBC Overdraft 120.00 (£685 to go, so paid off in five more payments)
Additions Catalogue 60.00 (I only actually owe £90 so could pay this off in January)

DH’s pocket money: 400.00 (this is non negotiable, he pays his petrol (£120) and buys his cigarettes (£4.50 per day) out of this, and even though it sounds a lot each month, he doesn’t have a lot left).

Grand total: 2486.24

Leftovers for me: 477.48

Groceries: 80.00 per week
Petrol: 40 per month

Leftover for everything else = 117.48

So, as you can see, there’s not a lot leftover for ‘everything else’

When DH’s car insurance comes due in May, I’m gonna have to put it on a credit card as I don’t have anything put aside, and no savings.

It’s alright saying “put x aside for this, and x aside for that” but I’m not that organised. What I would really like to do is be able to put X amount a month away in a separate account ready to dip into when we need to but I don’t have the resources to do that.

We do get a lot of overtime offered at work, and after tax it works out for me at about £8.80 per hour so it’s good if I can get it, and I can get some this month in time for February wage.

Kids are on packed lunches, so I don’t have to pay out for school dinners anymore.

Thanks for listening if you got this far!

PS - can I also point out that if I do decide to take out the loan (which is non-flexible) it will be for £7700, and I will balance transfer £2000 onto the Post Office card, which is 0% for 12 months.

MrBG

Firstly, well done Floozie for taking these first steps (doing the SOA, and most importantly, sharing your situation to elicit the advice of others).

Having read this thread for a while now it is clear that you are fully commited to clearing the areas of your finances that you can see are costing you money and draining your spending / saving / investing power.

Many, many people just do not have a clue about how much the money that they owe, through credit etc, are costing them; and how long it would take to clear them. Most certainly haven't calculated their total debt so are ill prepared when they have unexpected bills or commitments / change of circumstances etc.

I've undertaken a similar exercise myself, starting only about three years ago, and those first steps, getting a really good understanding your own financial situation has led to other unexpected benefits. The decisions I've made since have been better-informed, I've understood exactly what I'm doing, why, and known the impact on everthing else in my debt portfolio. The unexpected benefit is empowerment - I feel in charge of my own situation, and there is no better feeling than that, believe me!

The value of using a forum like this is that you have a true sounding board, some may advise you to do things that you consider are really too far, but you can balance this with the easier options. It's a case of Party Animal versus Hermit and only you can decide where you want to be (and of course, how quick you want to achieve your goals), but of course the No pain, No gain rule of course does apply.

One of the key stages for me was to realise that you could free up part of your outgoings to pay off other debts: for instance, I cleared my overdraft and store cards (at about 25%/month) and what I was paying in interest I now put towards clearing credit card debt. Following rationalising my credit card debt as you are doing, I've just reached the stage where it's all on 0%, and now I am balancing paying this off with overpaying on my mortgage, so I'm sort of saving for the future (really reducing long term debt).

Once the overdraft was cleared, I changed bank accounts to a higher rate current account, so the bank now pays me interest, which, again, is money I just wouldn't have had before.

Well done again, keep at it, 2009 will be your year!