Advice from those who have done it?

nadnad

ok first thing after next month you'll be saving £42 on the gym - if I were you I'd pay this off the laptop along with the 32 you are paying and the laptop is paid in 8 months not 18.

It would be ideal to get a 0% CC but if you don't think you will get one of these go for one with a low APR for the life of the balance transfer - check out Martin's article on CC's. But in the meantime that mbna card must have a high apr - you need to get that and the other 2 cc's APR's reduced. Phone the company tell them you are going to change cards but ask them is there anything they can do for you ie lower the interest? thats in the short term. You could also check what the APR is on your cards exactly - phone them up, and if I were you I would try to get as much of your debt as possible onto one card - i.e. the card with the lowest apr - phone the companys tell them you want to do a transfer to their card of xx amount and ask if they can give you a better rate than what you're on.

gotta go for now.

nadnad

i did a quick snowball - using the rough apr's you gave in your first post, and also putting in that you would continue to pay the CC's at the amounts you mentioned (ie don't reduce the payments each month as the balance goes down) it came out that it will take you 50 months to pay this off as it stands.

However if you can do as I suggested above and try to get lower apr's then all the better. in the short term I would try to transfer your capital one £2675.53 to your Cahoot card This means you would have one card with £8203 but all at 10.8% (or less). Now I'm aware that your limit on the Cahoot card is on 7500 - but see if they will give you a bit more credit with an even smaller APR than 10.8%. You could always try with Capital One as well to see what rate they would give you.

If you are able to transfer then I would cancel whichever card has nothing on it - that removes the temptation of spending and also it reduces the amount of credit available to you - which might make you a better prospect for getting better APR's elsewhere eventually.


Your credit cards are your first priority - they are costing you the most. SO lower those APR's.

Try snowballing yourself - play around with the figures see what you come up with http://www.whatsthecost.com/snowball.aspx.

Also if you could get some extra work obviously that would help.

Theres not much you can cut back on as you don't pay any bills or anything, so you'll just have to try and throw everything you have spare at your debt. And you also need to pay things off in the right order - ie highest APR first to save yourself interest.

50 months is 4 years and thats what I roughly worked out it would take you to pay this off. It may seem like a long time but its not too bad - and as I said change the APR's and pay any spare you have into it and you'll pay everything off all the more quickly.

I know you said your girlfriend wants to get a house with you - but this isn't going to happen in the short term - you certainly couldn't afford a mortgage or even rent and bills in your present situation so its best to be open with her - let her know the full situation. It would be so much easier for you to eventually get a house with all your debts gone and starting from scratch.

Bunnie1982

I would say not to look so negatively on your wages, it is still a lot more than what some people get. If you are unsuccessful with the job interview could you not look for some part time work to increase your wages slightly?

nicola1982_2

I'd suggest lowering your credit limits first as you aren't maxing them so you've still the temptation to spend more. Get them lowered two about £100 above your limit (£200 for one of them - we will call that your 'emergency card'). Get a freezer bag, put the 'emergency card' in it and stick it in the freezer. That way you have time to reflect upon you so called 'emergency' whilst you wait for it to defrost. Cut up the other two cards.

If you want to keep sky then make sacrifices elsewhere. Do you go to the pub? If so why not have the lads round for football and 'bring your own beer' nights. Utilise it. Good news you're cancelling the gym - have you thought about taking up cycling to keep yourself fit and save on petrol costs over the summer?

Cut down your food bill. Get a student cookbook - brilliant for cheap cooking for one and save leftovers for the following days dinner.

Also don't think of your income as being so 'measly', you earn more than a huge population of our planet and probably a lot of people on this board. Check out the 'benefits challenge' and see how little people are living off - some voluntarily and some because essentially they have to.

Good luck

MerseyLad

Thanks for the advice so far....

I understand the principle of paying off the higher APR's 1st, and so I will be doing this....what I wanted to just check was the following.
Lets say i move my Capital One balance onto Cahoot [as mentioned above]. Would it not be a good idea to leave the Captial One card open with a nil balance? Therefore prompting them to offer me lower/better rates to move a balance back to them? Rather than closing cards off or reducing limits.

To be fair, and perfectly honest, ive gone pasthe stage now where I would be tempted to use the cards, and as Ive said, i dont use them at all now. So why not use them against each other?

I just dont quite get the concept of say reducing limits or closing cards and therefore losing the opportunity to move balances about where the rates are better.
The only plus I can see in this is the reduction of total borrowing limits, and therefore the possibility that I can go to other places and apply for 0% cards and the like.

At present, i have to work with what I have as I dont think lenders will touch me as I am in debt more than my gross annual wage? So, i cant apply for the lower rate cards and move balances as i simply wont get them, and if i did, the limits would probably be minimum of say £500 which is no use at all.

Thanks.
ML.

tazgirl

Hiya,
I'm not normally much help on this one, but I saw something today that might be perfect to help you out with a kick start. A blog that I read mentioned that they're running a competition to write for their football site about the world cup and are paying a prize of £500 to the winner.... I know nothing about football, but then saw your original post and thought it would be perfect... worth a try anyway?

"Write for Bratwurst and also be the UK's first mobile blogger and we'll give you £500 to do it. We are looking for four bloggers to write for both Bratwurst and our mobile sister blog Germany 2006. We want bloggers who can great write great short posts about anything and everything to do with the World Cup. There are four spaces up for grabs.

The basics though is that you need to write up to 300 impassioned, maybe witty words about something to do with football or the World Cup.
http://www.germany2006mobizine.com/

MerseyLad

Tazgirl, thats very thougthful of you, thank you.....I will goto that link now and get something done.

Many thanks.

nadnad

MerseyLad wrote:

Thanks for the advice so far....

I understand the principle of paying off the higher APR's 1st, and so I will be doing this....what I wanted to just check was the following.
Lets say i move my Capital One balance onto Cahoot [as mentioned above]. Would it not be a good idea to leave the Captial One card open with a nil balance? Therefore prompting them to offer me lower/better rates to move a balance back to them? Rather than closing cards off or reducing limits.

To be fair, and perfectly honest, ive gone pasthe stage now where I would be tempted to use the cards, and as Ive said, i dont use them at all now. So why not use them against each other?

I just dont quite get the concept of say reducing limits or closing cards and therefore losing the opportunity to move balances about where the rates are better.
The only plus I can see in this is the reduction of total borrowing limits, and therefore the possibility that I can go to other places and apply for 0% cards and the like.

At present, i have to work with what I have as I dont think lenders will touch me as I am in debt more than my gross annual wage? So, i cant apply for the lower rate cards and move balances as i simply wont get them, and if i did, the limits would probably be minimum of say £500 which is no use at all.

Thanks.
ML.

but by leaving the cards open - other lenders will see that you already have a huge amount of credit available to you and they will be reluctant to give you more - therefore you are missing out on the best deals. For eg Capital One at the minute has the longest 0% around - until Sept 07, but because you have their card you won't get this introductory rate and they will never give you anywhere as good a deal (or they are unlikely to). I see what you are saying about working with what you have and thats fine - but as soon as you get the lowest rate available to you and transfer your balances to that card the other cards are unlikely to come back with anything better than what they first offered.

you are best to get the best rate now and reduce all unnecessary credit available to - then start paying off as much as you can, by doing this you will immediately start to improve your credit rating therefore allowing you to get the best deals. and I know you say you are past the point of being tempted but you did say you still use one of the cards occasionally - which you shouldn't be. Do yourself a favour and get rid of them.

MerseyLad

Here are the actions I have taken, and done this afternoon

I had £2500 saved away [i know, i know - why save at such and such APR, when you owe at alot higher - but it was money left to me, so i was reluctant to spend it]. This is the course of action I have taken. Below the details I gave this morning

MBNA Credit Card - Balance is £7126.08 and the Limit is £11,400 - Last months payment was £107.10 of which £98.98 was interest!!!!
Details on the statement show monthly interest as BT & Cheques 0.7935.

Cahoot Card - Current Balance £5528.02 and the limit is £7500 - Last months payment was £102.53 of which £43.48 was interest. APR is noted on the account as 10.8%

Capital One Card - Balance is £2675.53 and the limit is £6,300 - Last months payment was £82.26 of which £15.55 was interest.
Details on the statement show monthly interest as BT & Cheques = 0.561% and Purchases are 0.561.

The MBNA and Captial One Card I dont use at all anymore, and havent done for sometime....the Cahoot card I have used occassionally in the past 6 months.

1 - I called MBNA to ask them my APR and they advise it was at a whopping 18.9% APR. I then asked them could they help me with the Interest rate, their reply was "If you move the balance out and back in, then yes, but not now. [I know they charge for balance transfers and said this, to which they had no reply] so I said, "Whats the best you can do?". They said "We can give you 13.9% for the lifetime of the balance".....So I said OK, and then moved on to plan B. So MBNA is at 13.9% as opposed to 18.9%.

2 - I called Cahoot to ask them the same. They said "We do not do balance transfer offers, nor do we review rates. Everything is done, and fixed, at 10.8% APR.

3 - I then called Capital One who advised that I am on 6.9% APR, and any balance transfer would be at 6.9% too. But I only have £3500 available, and therefore it wouldnt cover my full MBNA Balance of £7200.

Therefore, what I have done is transfer £3500 of the MBNA balance to Capital One to get the 6.9% APR. I have then paid the £2500 I had saved onto my MBNA card as well, and I have moved the remaining £1145 from MBNA to Cahooot. So now, MBNA will go to a NIL balance. I have also transferred the £545 owing on the Laptop [which i found out would be at 19.9% from June 2006, to Cahoot as well.

So as it stands.

MBNA - £0
Laptop - £0
Capital One £6200 @ 6.9% APR
Cahoot £7300 [approx] @ 10.8% APR.

My thinking is that MBNA will in the course of the next 3-6 months offer me something to move back, noticing that they have lost £7200 in balance, and over £100 a month in payments.

What Im wondering is if MBNA offer me 6 or 9 months at 0%, would it be worth moving the £7300 from Cahoot back to them if they charge a balance transfer fee? Would the savings i make far out weight the charge?

Also

I have began to sort things out to make a few extra £££.

- Things ready to go on ebay
- My girlfriend does canvasses of artwork that are brilliant, and these make about £15-£30 profit each - so will try and sell these.
- Few other ideas.
- Gym cancelled already
- Postal DVD rental cancelled
- Broadband, I am considering a change to cheaper one. [any recommeded with unlimited usage/downloads?]

So......for the 1st time in about 8-10 months, i feel like I have achieve a little step financially....obviously, the hard work starts now, but the longest journeys start with the smallest step hey?

Let me know what you think.

MerseyLad

Oh, and all the cards are cut up.