Help being stung by interest.

flash0616

Me and my partner have credit card debts of 25000. We can pay back 500/month bu due to cards being around 20%apr we are hardly clearing monthly interest. We have average credit rating but cant get balance transfer on this amount. Dont know what options we have but feel we will be paying this forever. Anyone have any advice please.

sandrad44

Hi

A few years ago a though we were drowning in debt...... sometimes I didn't even have the moneyto answer the door to the paper boy !! and when hubbys wage went in it was eaten up with bank charges. I was making the minimal payments but the interest just kept onertaking the payments. near to beaking point I phones cccs who said I should go bankrupt as they didn't see any way out for us. I hung it out and eventually went to local citizens advice who were fab and very understanding. that was in 2007. debt was approx 23000 now down to approx 8000 within two years we should be debt free........ :j its not easy but we have alife now without the stress of the dreaded mail and phone calls. even went on holiday this year ! so there is light at the end of the tunnel as they say.......:rotfl:

Tixy

Hi Flash and welcome

First I would suggest you write out a detailed income & expenditure statement and see if there is any area of your expenditure you can reduce at all. This would then allow you to make better in roads to the debt.

So look at all your utilities, insurances (house & life as well as car), phone, broadband, mobiles etc and use the comparison sites to see if you can get better deals - if you haven't switched deals in more than 12 months chances are you could make savings. Consider getting package deals for landline/broadband/(satellite tv) as these work out cheaper than from separate providers.

Then you could look at whether you could move to a cheaper house (if renting) or consider if you can increase your income by getting in a lodger or working overtime.

This is a good form to use as it makes sure you remember to include everything - http://www.makesenseofcards.com/soacalc.html

If you post it on here then people may be able to advise where you can make savings or cut back.

Once you start to clear a couple of debts you may find you are able to do balance transfers to lower rate APRS.

If you still can't get the I&E to balance then you may need to consider a debt management plan or other options. If you go down this route then contact one of these people - http://www.moneysavingexpert.com/loans/debt-help-plan#help
A debt management plan (which I assume is what sandrad is describing above) is an informal agreement with your creditors whereby you pay less than the minimum - you would agree a monthly repayment with your DMP organisation who would then distribute it amongst your creditors. They will also ask for interest & charges to be frozen (some creditors may agree to do this but others may not). A DMP does have a serious long term effect on your credit rating though - and because you pay less than the minimum it is likely to take a long time to repay your debts.

Hope that helps