Reshuffling experts needed!

happyformonths

Hello chaps,

I'm very new here and am much more of a "taker" than a "giver" at the moment, but I'd appreciate it greatly if you could allow me to "take" a little more at this point...

I'm after some advice about how to reshuffle my debts, as I've just been thrown by Egg's sudden introduction of uncapped balance transfer fees, and I'm shuffling more than repaying (TRYING to repay too...) as my work is extremely intermittent at the moment. And basically the maths is confusing me!

I'll post my credit used/credit available situation:

Virgin Card 0% until 1 June 06, then 15.9%
balance £4670
limit £5900
min repayment £5

Cahoot flexible loan: 9.5% variable
balance £5680
limit £8000
min repayment greater of 2% or £50

Smile credit card: 10.9% variable
balance: £399.98
limit: £3000
min repayment: 2% or £5

Smile overdraft: 9.9%
balance: I'm currently in credit, but not much!
limit: £800 (I just asked them to decrease it from £1200 to tighten things up)
min repayment: £0

Egg card: 15.9% BUT anniversary month begins 1 May, so 0% for 5 months from then. However their new BT fee would be 2.5% with no maximum.
balance: £0
limit: £8000

HSBC current account overdraft: 17.9% or thereabouts
balance: £0
limit: £1500 - I keep it for absolute emergencies...

I also owe a friend roughly £2200 in a written arrangement: he lent me £5000 a few years ago. He's charging a "tracker" interest rate: 0.5% above base rates, so currently 5%. We arranged no minimum payment but I'm currently paying him £50 a month, when my intention was originally to pay £200, and although he says £50 is cool, I don't want to reduce it any further.

So... total debt is £12,949.98

Total credit available to me including what I'm using is £27,200.00 (I don't count the friend loan as credit available to me - when it's paid off, that's it).

Obviously I want to keep interest rates as low as possible, and this has to be my priority at the moment, as my work is erratic. I'm paying off lumps when I get anything in. But I have to keep my monthly payments relatively low too, as my income is patchy. I would say the maximum repayments per month I can cover would be £240. I'm having to accept that the debt will take a V E R Y long time to repay. But as I say, priority right now is to keep those interest rates down.

Can anyone help? With my Virgin card 0% deal ending, I was going to BT that to Egg for my anniversary period, plus a chunk of the Cahoot loan, but that'll now cost me over £200 to do, and it pains me to have to pay that -AND the interest on it...! But am I better off swallowing the charge? I can't work it out.

I am wondering whether Virgin would offer me a decent rate after the end of their 0% period, but I guess I won't find this out until May/June. I have complained endlessly to Egg but they won't budge. I don't want to apply for other cards just now as I doubt I'd get past the first fence - new address since January, work pattern extremely patchy the last year, and so on. I've never missed a payment or anything in my life, but the other factors seem to be more important for one's credit score. I was turned down by HSBC for their 0% card, for example.

Anyway, sorry to make it long... I would be so grateful for any advice! :A

x happyformonths x

climbgirl

First step is to post a full SOA - statement of affairs. You've already done the debt part, but we need to know details of your income and your outgoings (rent, food, utilities etc). The more you can tell us, the easier it will be to help.

It seems like you've shifted cards a lot so getting more 0% deals is probably not the answer. You'll need to look at finding income within your budget to throw at these debts, starting with the highest APR first.

You can also consider bringing in extra money by selling things on ebay/carboots, taking a second job, all to throw at the debts.

climbgirl

There doesn't seem to be a lot of room to shuffle within the cards that you have - maybe move some from the egg to the smile, it's got a lower APR. But if there's transfer fees, will it be worth it? You need to crunch the numbers.

I think you're better off trying to free up more cash to throw at the debts. If you've been shuffling before you're going to run out of 0% cards you can apply for, so you need to look snowballing (freeing up cash and throwing it at the debts with the highest APR first).

lynzpower

hi love

Just to ask, you say your work is erratic? This of course is going to cause problems- no chance of going more permanent??

Oh and HI! Welcome!!

CLAPTON

manipulating credit card balances, while it may help reduce overall interest payments, is very very slow to make a real impact on the debts if you are only paying the minimum amounts each month. really its best to see if you can increase income and/or reduce other spending.

however as far as BT fees of 2.5% are concerned, this approximates to an equivalent interest rate of around 6 to 8 % , so in principle if you move money costing you more than 8% APR you make a saving (all other things being equal).
In the longer term you would be better looking for low life of balance cards rather than 0% BT cards.

happyformonths

Thanks everyone:

Yes, I avoided an SOA because my whole LIFE is erratic, not just my work!

I'll give you an idea and you'll see why I didn't bother... At the moment I'm living with my fiance, paying him a "token" £300/month for rent and food, and £75/month for bills which I currently have no control over (yes this bothers me, big-time! We share the house, which gives my bloke an income, but even though we have all sat down and agreed we must hammer the bills down, the lodgers still go out leaving the central heating on full blast etc etc). However, this stops and starts, as we are often abroad for weeks or months at a time, staying with family for no rent, but contributing to unpredictable bills. We tend to get by on about 500 Euros a month each during those times.

My only fixed year-round outgoings are currently £17/month for contact lenses and aftercare, and £3 to the charity Survival (I know, I know.) Oh and Christmas!
Everything else is extremely ad-hoc; my biggest expenses being for travelling to and from the different places I live.

I've only *fairly* recently learned how not to spend without thinking about it, although I've never been one for lots of clothes and so on, and we don't have a television so there's no question of Sky packages or anything.

My income *currently* equates to about £1,400 per month - not too bad you say - but bear in mind I'm working on a short-term rolling monthly contract, only since January, and that over the tax year I have earned JUST under the first tax threshold, i.e. about £5,000. The reason being that I have just set my boat to sail as a freelance writer/researcher/contractor, and my self-employment earnings are still very low, so I'm temping full-time right now as well.

The whole situation is my choice, a fact I remind myself of daily, as I worry about money on an hourly basis, something I know people here can identify with. I did work in a cushy, well-paid job until last year, but was living a chaotic and expensive lifestyle in an expensive area, etc etc, and slipping into deep depression due to not following the career path I know I'm here for.

So, what with choosing to be in debt, how can I dare to post on the DFW board??! Well I am unequivocally a DFW: I have laboured under debt since I was 18 years old, but have only recently learned how to budget (I'm 30 now) and finally grasped the whole equation about income and outgoings (DUH!). I really long for the day when this burden is finally gone, and I can actually pay for things out of my OWN money.

I'm aware that if I don't get a permanent, well-paid job asap, which is a choice I have, my debts won't be paid off quickly and there's a chance they may get slightly worse.

But at the moment, my choice is to pursue the path of short-term misery and long-term happiness - well in fact, short-term happiness too, apart from the money worries, because my experience of those "permanent well-paid jobs" has been of poor mental health for me, illness, overspending to comfort myself: all sorts of rubbish I want to put behind me. So I'm not getting that permanent well-paid job. Words of sacrilege? Probably, and I hesitated a long time before exposing myself here, in case I was judged. But it IS my choice, and part of facing up to my debts is facing up to the rest of my responsibilities to myself as well. Pounds and pennies are extremely black and white things - whereas the rest of life isn't.

Sooooooo... that's a long way of explaining why shuffling's where I'm at right now. I am working as hard as possible *in the way I can accept* to get my debts down, but having to also accept it will take a lot longer this way, and in the meantime, wanting to arrange things so that as little as possible of my debt repayments are for actual interest.

Oh, do you want to know a scary thing? It took me, what, 12 years to get into this situation: a quick calculation shows that £13k divided by 12 years is £1083.33 per year overspend, which breaks down to... £20.83 per week. It's a crude calculation, and I could make all kinds of excuses about where the money went (for example, the £3 a month to Survival is but the tiny remnant of the large charity payments I used to make) but IN FACT, all I did was overspend by £20.83 per week. In London that doesn't buy you many cappucinos and bought lunches... ARGHH! Salutory though innit?!

And yes I do feel anxious about the choice I'm making; I do wonder every day whether I'm doing the right thing; I do sometimes wish for a settled, earning, predictable life. And even more, I do realise I'm incredibly lucky even to be able to do what I'm doing. I haven't any dependents, and I won't lose the roof over my head even if I suddenly can't repay anything. But I'm just a person trying to make the best of things in all parts of life.

So that's my story, flay me if you will

Thanks again for the advice so far.

x happyformonths x

PS I am already snowballing as far as I am able - every week! My keen-ness to do this is partly why I've chosen flexible credit facilities wherever possible.

lynzpower

Nah, you sound like me Happyformonths, completely appreciate what you mean.

As for the moving around business, well, I dont really get that, but chaos is a state of living I always think - I know this abit , moving around a lot, until fairly recently.

the fact is this sort of lifestyle costs money, and you are in a LOT of debt i think. Is there no way you could get a soul-crushing job for say, 2 days a week? then freelance around it?

happyformonths

Lynz, you're right, I need to have a settled time somewhere or I'll never get ahead.

I would actually quite like to do the "employed" work I'm doing now for 2/3 days a week, I reckon I could handle that for a year or two.

It's tricky convincing my fiance to stay in one place for any length of time... I don't want to slip into blaming him, but his solution to my debt worry is to consolidate :eek: - even if I wanted to, I don't think my score would be high enough - and he claims we could both live in some cheap country on the money he'd get from renting out his house. Well, maybe it's theoretically possible, but I don't want to feel banished from the UK for the 25 years my consolidation loan would take to pay off... :rolleyes: and besides, I don't actually want to have to depend on him entirely for money.

Hmm, a few relationship issues to iron out there...

If I were on my own, I would stay in the UK for a few years, work part-time and freelance around it (AND control my own bills, lol) and do it that way. However, I have to factor him in, as I'm not willing to give him up either. I've just got to brainwash him into my way of thinking!

x happyformonths x

lynzpower

Hey happyformonths, you will certainly not be the last person having to kick the other half up the rear, weve all had to do it repeatedly on here and from my perspective not just metaphorically. lol You sound like me, wish to disappear off somewhere exotic etc, there will be no way that there is any earning potential and certainly not what there is here. So we are makling the most of it, getting a nice lil nest egg behind us, and only when we can really go and not ever be scared to come back, we will do it

Im convinced, well in fact we are both convinced, it is more than possible, with a bit of hard graft and suffering. Tell your OH to get on board quick style, and the sooner you have it paid off the sooner you can go.