Paying over £500 per interest - help!

stevesmithanon

The debt was not built up with frivolous spending (e.g. haven't had a holiday in 5 years) but rather with - in particularly recently - various business problems. The nature of my work is quite volatile. I was doing nicely last year and expected to clear my debt by last Christmas. Then in September, I lost 90% of my income overnight. I am not shirking my responsibilities, but lets not make assumptions about how I got there.

All positive help is appreciated.

For the line of work I am in, I need a credit line, so my goal is to preserve that. If I can somehow get these cards rotated onto low credit terms, half my problem is solved. Its just when you are charged 35% rates that it becomes a killer. MBNA, in all their goodness, hiked my rate from 17% to 30% and then from 30% to 35% - all in the space of 3 months! I don't think this kind of increase should be allowed, particularly when they have you over a barrel.

nickmack

Hi, Martin’s asked me to post this in these circumstances: I’ve asked Board Guides to move threads if they’ll receive a better response elsewhere(please see this rule) so this post/thread has been moved to another board, where it should get more replies. If you have any questions about this policy please email [EMAIL="abuse@moneysavingexpert.com"]!!!!!![/EMAIL].

seeya23

that a lot of credit card debt

sheba

Hey there stevesmithanon :hello:,

So your thread has been moved over to the debt-free wannabe board in the hope that you can get some +ve advice and less judgements:eek: (!!- btw- if you are running your own business I can easily see how you could run up such lines of credit- not that it's any of my beeswax anyway x x)

You have been given some good advice already about 'pricing' up the cost of balance transfers (fees incurred v's interest saved) and I am afraid personally I cannot help you in the best way of 'juggling' your debt- it depends if certain low interest cards may offer you extended credit, if you can get a low interest loan etc- other more knowledgable peeps may help you with that. You might consider using the snowball calculator to help you learn to tackle debts in the right order- Higher interest 1st- but this depends on you having enough to pay the minimum on all cards with some extra to throw at said highest interest debt. If this is not the case you may also find it beneficial to post up your SOA of your financial outgoings to see if you can 'tweak' a little surplus there to start to deal with debts rather than just juggle (this coming from the best money juggler ever!!- my debt - pay no interest so it never goes up-yay- but always pay min never goes down- DOH!!-working on it though!:o).

Other than that I can offer you nothing other than heaps of good luck in tackling your issues- you are on the right path here!!:T

Best Wishes

Sheba

Little_Miss_Uni-Debt

Hi there!

I presume that the interest listed on the first page for each of these cards is per month? Do you have the APR's for the cards? You have mentioned that your interest on one card went to 35% but all cards are listed at around 1,2 or 3%. Apologies if I have got the wrong end of the stick.

Also what are your min payments on these cards? Around 3% for each one?

Also what is the max per month you can throw at paying your cards off? I understand your wage varies but is there a standard amount you can guarantee each month?

I was going to do some snowballing on your behalf and see what it came out at.

Debtoxing

EASTERNTHUNDERUK wrote: »

Im sorry your in this mess i really am:rolleyes: but perhaps you should have thought about all this before you went playing out with your cards, thats one of the biggest mistakes you can make and problems you build up in store for later when you simply build up your card debt so far that your paying hundreds in interest alone which you obviously cant manage with:rolleyes::rolleyes:, oh what the heck why not just take out another card why dont ya:rolleyes::rolleyes:,transfer the balances blah,blah,blah although i very much doubt you will find anyone willing to transfer due to your already mountanious debt, that is of course unless you have a huge salary to prove to the lending institutions that you are suitable risk to transfer othr providers balances to, simple fact is,if you cant affordd 500+ in interest perhaps you shouldnt have been so sily in building it up in the first place:rolleyes::rolleyes::rolleyes:

Ive never had this problem and never likely too:T:T:T

good luck because i think youll need it :rolleyes::rolleyes::rolleyes::rolleyes::rolleyes:

Holy moly - you really are a contender for Smug Git of the Year, aren't you?

L.

michaels

Posted this on stoozing.com but thought it could recycle to here too:

Not our normal business on this forum but here is my 2ps worth:

Is it worth the Fees to BT any money on the highest rate cards to any unused credit on the lower ate ones - eg if you could negotiate a 2% BT fee some of the cards you would save back 1% of that per month compared to the highest rate cards.

Another card not mentioned is a Halifax one which (if you could get one) would give you a 12 months interest free period on purchases which you could use for as much every day spending as possible (even looking at the non-obvious things like council tax, mobile and utility bills and mortgage payments), even if there was a premium to pay by this route it would be cheaper than the 2% a month+ you are currently paying to borrow money. NB this would then require you to use the money that is going on to Halifax card to pay down the highest interest rate cards rather than it just being new debt.

All the above advice assumes that you will use the cashflow generated to pay down the highest rate cards - can you trust yourself not to spend using any extra credit or cashflow you free up?

Little_Miss_Uni-Debt

:DHey,

I have done a few calculations & realistically even if you are paying around 600pcm to your debts it would still be going up and up.

At this moment in time (with no shuffling) you would need around £800 minimum pcm to make good in roads to your debt. If you are fortunate enough to be able to pay that much then you could be debt free in 84 months (by June 2016) in this time you would pay over £32k in interest.

However if you just paid 600pcm to your debts then it would take 737 months i.e not in your lifetime. It would cost around 180,000,000 in interest (yes that is correct!) Not that you would be around to pay it in November 2070!

That extra £200 pcm is vital.

These calcs are based on the following APR's and paying the cards off in this order :-

MBNA = 36%
Egg = 28%
Lloyds = 20%
Cap1 = 19%
BC = 13%


Tbh I have tried to balance transfer in the past and I have always ended up paying more or just about breaking even in the past just because the transfer fee is usually the same as what you save. Just throw yourself at clearing MBNA and Egg ASAP. Cut back on everything, try to up your income - once those 2 are gone then life will be MUCH easier!!!

Maybe post a statement of affairs to see what else we can help you with.

Hope this helps.

P.S stay away from that 2nd MBNA card. If you do have to spend on credit for your work - use your BC!

stevesmithanon

I've cut costs on a few expenses I had so that saved £100 per month or so. But my main opportunity is with earning more, so I am getting up at 6am and putting in up to 15 hours per day work. Its helping so far. In the last week, I've upped my expected monthly earnings by about £300 per month. And further work will help this even more. For me to really benefit, I need to get the space so I can get them all transferred around, thus freeing me from the exorbitant rates that MBNA charges, but also better deals on the other cards using BT's.

Tixy

Hi Steve

Just a quick work of warning - you may find that if you pay off some of your credit cards thinking you will get offered a better BT rate what sometimes can actually happen is that the lender drastically cuts the credit limit or even stops the card altogther.

This seems to be happening more and more as the banks try to cut their exposure to debt which means they have to hold less capital themselves.

I'm not sure which cards are the worst for doing this at the moment - I think there are some cases of this happening on the credit card forum. A friend of mine had her MBNA limit cut from £4000 to £800 once she had BT'd her £3.5k balance elsewhere. Also heard Egg doing similar stuff.