loan vs credit card debts??

slowlinda60

Hi
this is my first time here and I need help!
My husband and I have £19,000 on 6 credit cards and pay about £500 a month towards clearing it. We tried to get a loan in the past from our bank but were turned down because we no not have a mortgage, and were told they would not take it because it was to pay off credit cards, even though we proved we would be paying less in a loan than on the minimum payments.

Should we try and get a unsecured loan from somewhere else (that is if anyone will give us one) or should we keep paying the credit cards?

We manage to pay just over the minimum each month and havent really used them for about six months so the balance is going down VERY slowly. The cards are all in my name because before we got married my husband was very bad with paying his one card card and had it taken off him. We have been married 2 years now and have not been late with any payments.

Any advice please!!!

lynzpower

Hi there Slowlinda Welcome to DFW :hello:

I would say, nope a loan isnt the answer. If youve never missed a payment etc, I wonder why you got turned down for the loan- were you trying to get a SECURED loan ie that is tied to your property, whih would explain the mortgage thing. In any even, a close shave me thinks. If you havent missed a payment, have you tried to get 0% interest rate cards. Even if you are paying the minimum then at least the balances will be reducing instead of paying off the stinking interest

Why dont you pop up a SOA, thats all your incomeings & outgoings, see Southern Scousers first time posters sticky and have a good read. We can then go through whart you are paying out, and see where we can save you some extra money to clear these debts quicker.

Well done for finding us! :j and stick with us, it's worth it I promise

Emmzi

If hubby has had cards taken off him, try applying in your name only for 0% cards.

Also check your credit report- free trial at creditexpert.co.uk - just remember to cancel it!!!

And do post an SOA so we can see if we can help.

Joe_Bloggs

There is a post, the third from the top, that details how first time posters can get started on getting rid of the debt. The posts at the top are termed stickies as they never move.
I'm sure you can beat these debts and be an example to others, once advised of the best strategy.
J_B.

slowlinda60

Thanks for all your advice

I have not tried for a new credit card for about 1 year now. I had been turned down before that for about three cards. Didnt want to apply for any more because of all the searches.

Got a copy of my credit record about the same time. Couldnt see anything on it...could it be the shear numbers of cards I have? The loan I applied for was an unsecured personal loan. I queried their decision in my branch and the manager tried to get us anything but head office still turned us down.!

Do you think as I havent has any searches for over a year I should start again?

slowlinda60

here is my SOA

My income £1000
Hubbys £1250
Benefits £100

Outgoings

rent £430
TV £11
Insurance £22
Electric £27
Phone £22
Car Loan £202
Sky £22
Internet £15
Cats Ins £18
Food £250
Petrol £100

Cards

citibank Balance 200 (limit 1500)5.9% life of balance min £10
capitol 1 1950 (limit 2500)6.9% life of balance min £65
virgin 5000 (limit 54000 13.9% min £60
lloyds tsb 4500 (limit 5000) 13.9% min £100
tesco 4900 (limit 5800) 15.9% min £155
monument 2900 (limit 3500) 17.9% min £70

I always try to pay a little more and usually pay about £500 a month (more than a loan!!!)

lynzpower

Definatly worth having a look at your report.

When you say he had his cards taken off him, by whom? The bank? you? Someone else

An SOA best port of call, you cant get out of debt witout one. take a look at martins budget planner at the top of the page, should help you get an idea of all the things you usually lay out money for.

Lynz
xxx

lynzpower

here is my SOA

My income £1000
Hubbys £1250
Benefits £100

INCOME 2350

Outgoings

rent £430
TV £11
Insurance £22
Electric £27
Phone £22 ( whats this for?)
Car Loan £202 ( APR?)
Sky £22 ( can you get rid, this is luxury at the mo)
Internet £15
Cats Ins £18 ( who with M&S usually said to be quite cheap?)
Food £250 ( this is high, we do 100 a month, although no cats )
Petrol £100


I make your budget -210 per month. So you could make more inroads towards breaking even by bringing your food down to 100 and ditching the sky. However, i suspect that there are plenty of other things that crop up, that end up going on the cards, birthdays, Xmas, days out etc.

Have you cut the cards up?
Have you started a spending diary?

Car boot sales? Ebay? Amazon? Second job? Extra income is needed to get rid of some of these debts as well as slicing back a bit.

Can you do a storecupbard challenge for a month, if you are spending 250 a month, I suspect you have plenty in the cupbards - meal plan and buy only the ADDITIONAL ingredients such as veg/ bread/ milk in order to stretch it out as much as you can.

Best of luck

lynzpower

In fact, looking again at your cards. If you storecupbard challenge you could save 200 on food next month. that then could be chucked at your Monument card, and then could you move your monument balance, to your citibank & capitol card. Meaning no more 17.9 interest.

I think the reason why you have been rejected for cards is that you have too many, which happens.

all_hours

Have you run your credit cards through the snowball calculator, this will tell you how to use the extra payments to reduce the debt faster.

http://www.whatsthecost.com/snowball.aspx

all_hours

Total outgoings £1119
Minimum payments £460
Total = £1579

Income = £2350

Leaving a massive £770 to overpay on the cards. That's with no cutting back on your budget, if you cut back you'd be able to overpay even more.