Is this too easy a way out?

Ellimae

I've just joined and after reading some of the posts, I feel a bit of a fraud. My debts total £5,400 and compared to some, I feel that I shouldn't be asking for help.

I am a single parent of a 4 yr old and my debt just seems to be growing and getting me down. I have just been rejected for a Capital One 0% card (though can't see why as I have got my Experian credit report and have no bad debts). This card was going to be my saviour!!!

A rough breakdown of debts are:

Egg CC £3500 15.9% (?? I will check this)
Overdraft £1540 7.25% annually
Next £ 192 26.49% APR
Ikea £ 161 (Can't find it but will)


I also have an outstanding loan but borrowed this money for my niece but she pays the payment into my bank religiously every month.

The "easy way out" I am asking about is taking a "payment holiday" from my mortgage for a year. This would allow me to put £450 per month towards these debts. I also have a further £90 per month as two HP agreements will end this month.

I recently cancelled a Barclaycard and they sent me a letter stating that they could open a new account for me. Thought I could get 12 months 0% from them and transfer my balance since Capital One don't want me.

I can do a SOA but it will have to be tomorrow cos I'm shattered after reading all of OberonSH's post which was very funny but perhaps used it as an excuse not to deal with this.

Thanks for any advice.

Brassic

Hi there Ellimae and welcome. I am a complete newbie on here too so my advice is probably best skipped over, but i've had so much help I feel the need to try to give some back

Payment breaks sound good - but I think you'll still be accruing interest (someone tell me if I'm getting this wrong). Soooo, you need to work out how much interest that extra year will cost you. Let me tell you, I took a month break from my 16k egg loan (7.7%) and I was shocked how much extra it added, so beware.

Not sure about cc's if you have already been rejected by one, but as an intermediary measure, have you tried ringing them and telling them that you are thinking of going elsewhere for interest free offer? I did that to mine and they reduced it straight away from 12.97% to 6.95% and transferred my horribly expensive barclaycard over too.

I'm sure everyone else will have some better ideas for you, hope you get it sorted.

chevalier

Hi there
It is too late for constructive thinking. But the important thing is that you have recognised you need to do something about your spending. The danger with the payment holiday is that the money you are supposed to be saving to go on the debts, gets frittered away.

You know well 4yr old hasn't had x y or z for ages
oh a weeks holiday won't hurt
it would be great to get my hair cut just this once...
sky at only £15 per month a bargain.....

If you don't change your underlying spending habits, then all that will happen is that you end up in more debt.

I am sure if you post an SOA the old hands on here can find out ways of cutting your expenditure.

You also might like to get back to Capital One and challenge their rejection. I think you can ask to see the credit report that they have used to score your application, if you pay a small fee. It may be that they have got the credit report of someone else with your name or something.....

Best of luck

OberonSH

Hey there, welcome to the board. You haven't a massive amount of debt, but put against your income this may be why they rejected you. If you have had an offer of a 0% transfer personally I'd take it - first thing would be to get rid of that hideous Next card! Then the next highest balance, and as you clear a space on the 0%, transfer again.

Looking forward to seeing your SOA, so we can help you out a bit cutting the bills. PS, thanks for your kind words about my wittering, glad I could cheer you up.

MCBIRNIE25

Hi Ellie and welcome.
First please don't feel like a fraud. Debts are debts, and however much we owe, if it concerns you as an individual then it is a problem.
I personally would not go for the spending holiday, to many unforseen problems further down the line.
Get the next card paid off first. That's outrageous interest. Pop up an SOA and everyone will offer some advice.There are some very very good people on here, and I am sure we can help.
Have a good one,

MCBIRNIE25

lynzpower

Debt is debt and no matter how much it is, we are all here, cos its doing our heads in .You are in good company :wave:

Read southern scousers first time posters and do an SOA.

I would also say, someone else was right, you will still get charged the interest on a payment holiday, so effectively times your mortgage by 12, and thats what you will owe them at the end of the mortgage, or worse, out of your profit if you come to sell. Be very careful.

Id say for a debt which isnt massive ( im about the same now- ish) there is likely to be ways to deal with it, without going down this route, by savvy spending & plenty of Not spending :rotfl:

Lets see what we can do eh?
Lynz
x

Ellimae

Hi guys

Thanks for your words of encouragement. Sorry it's taken me so long to get back on the board. The reply from Chevalier rang true and I guess I was trying to avoid the reality of facing up to my bad spending habits. I have detailed a SOA below. I have tried to be as honest as I can (even including the hairdresser who comes to my house but is not much cheaper than the salon!!) I am now considering dyeing my own hair and just paying for the cut!

Monthly Incomings:

My Salary - £1549.22
Family Allw - £ 69.80

Total - £1619.02


Monthly Outgoings:

Mortgage - £500.00
Council Tax - £104.00
Gas - £ 33.00
Electricity - £ 47.00
TV Licence - £ 10.99
Sky - £ 15.00
Phone - £ 30.00
Car Insurance - £ 36.00
Endowment Ins - £ 49.45
Food - £200.00
Diesel - £180.00
Home Ins - £ 28.20
Poll Tax Arrears - £ 50.00
Contact Lenses - £ 10.00
Egg CC - £ 70.00
Ikea - £ 7.00
Next - £ 18.00
Hairdresser - £ 22.50 (£30 every six weeks)
HP for Beds - £ 36.00 (Balance £88.61)

Total Outgoings £1446.64


Egg CC £3500 15.9%
Overdraft £1540 7.25% annually
Next £ 192 26.49% APR
Ikea £ 161 (Can't find it but will)


The reason I thought about the mortgage holiday was to get rid of the debt quickly but that's my answer to most things - do it quick.

I phoned a got some details and maybe you could have a look at this and advise.

They would only give me a holiday on part of my mortgage as part is a further advance. They would give me a holiday based on £69,000 part of my mortgage. This is split into £25,000 on endowment and £44,000 on repayment.

I would still accrue interest on the repayment side and this would total
£3,397 for a 12 month holiday.

At the end of the holiday term, my payment would rise by £40 per month for the remainder of the term (March 2025).

I have three endowment policies attached to the £25,000 and they mature in 2009, 2010 and 2014. My thought was then to maintain the same mortgage payment and thereby bring my completion date closer.

Am I just hoping for too much?


I read Southern Scouser and I think the spending diary would be a big help. I am trying to bring my lunch to work but the other day it was cold (well it is Scotland) and I bought my lunch and spent £2.75. Some days it would be more and this would be £15 per week so even i can see the sense.

I go shopping to Asda on a saturday and spend on average £50. My reason for going is to help my sister with a lift but I think £50 for me and a child is ridiculous. Can someone explain the grocery challenge please?

I am starting to think of ways to save so maybe there is hope for me yet.

As regards the Credit cards. When I closed my Barclaycard they emailed me and said "Have you changed your mind? No problem, we can open a new Barclaycard account for you then you'll continue to enjoy the benefits that BC offer".

At the moment they are offering 12 months 0% with a transfer fee of 2.5%

Should I try or should I consider one of the low fixed rate for life of balance transfers as the credit card companies seem to be getting wise to tarting?

Wow, this feels like I've been typing for an age. Sorry it's sooooo long.

Thanks again

lynzpower

Okie dokie

Monthly Outgoings:

Mortgage - £500.00
Council Tax - £104.00
Gas - £ 33.00 ( seems a bit high?)
Electricity - £ 47.00 ( sees WAYYY too high? Is this paying off arrears? https://www.saveenergy.co.uk)
TV Licence - £ 10.99
Sky - £ 15.00 ( do you really need this? Seems a bit wasteful to me)
Phone - £ 30.00 ( this is high whats on there?)
Car Insurance - £ 36.00 ( is thsi the cheapest? shoppped around?)
Endowment Ins - £ 49.45 ( is your mortgage IO then)
Food - £200.00 ( YES, too high)
Diesel - £180.00 ( for the car :eek: can you car share or reduce journeys by walking places)
Home Ins - £ 28.20 (is this buildings & contents)
Poll Tax Arrears - £ 50.00 (how long left till these are gone)
Contact Lenses - £ 10.00 ( ok, you could save a couple of quid here)
Egg CC - £ 70.00
Ikea - £ 7.00 ( this will be something like 20% as I got offered one once, this has to be a priority to pay off)
Next - £ 18.00 ( eeek this ones a crippler too)
Hairdresser - £ 22.50 (£30 every six weeks) ( you hgave suggested what you are going to do, good plan
HP for Beds - £ 36.00 (Balance £88.61) So less than 3 months left - in 12 weeks you will have paid these off and theres a spare 36 to pay off debt with

Total Outgoings £1446.64


Egg CC £3500 15.9%
Overdraft £1540 7.25% annually
Next £ 192 26.49% APR
Ikea £ 161 (Can't find it but will)

Move as much as you can to low LOB or 0% cards.

Grocery challenge is just on the Old style board. I found it when I first started, and its just a way of setting yourself targets to get your shopping right down. This month me & lopyloulou are going head to head on it,. but you dont need a partner, you can do it yourself. I think you can halve what you are spending there with little trouble, it would be more of a graft to reduce it further, but I think its more than possible! :beer:

spud30

Hi Ellimae, and welcome to DFW :j

Have a look at http://www.entitledto.co.uk/default.asp and see if you are entitled to claim tax credits.


The experts will be along shortly to have a proper look at your SOA

x

MinnieSpender

Hi Elliemae

Your debt's around the same as mine - but debt is debt, and better to knock it on the head now rather than let it get worse. Well done on getting your lightbulb moment so soon.

Ellimae wrote:

I am now considering dyeing my own hair and just paying for the cut!

I started doing this. You often get BOGOFs on hair dye. I prefer semi-permanents (they make your hair shinier and re-growth is less of a problem) and like the Boots own brands. There's usually some sort of deal on these. Have you considered changing your six weeks to eight weeks to cut down a little? You'll hardly notice the difference. Or check out local colleges or training schools. They're supervised and you usually (!) get a great bargain.

Council tax - do you qualify for single person's allowance?

Gas and electric - think about switching. uSwitch got my monthly payments from £43 to £19.

Sky - is this necessary?

You can definitely get your food bills down. Check out the Old Style boards for loads of great ideas as well as the grocery challenge. I see you're an Asda shopper - me too. If it's in a tin, it's always SmartPrice for me. Massive savings there. The SmartPrice biccies are good too! Well worth checking out that range for everything. If you don't like them, you haven't lost much by trying them out.

Lunches to work are the way forward. Cheaper and much better for you. I do my lunches before bed - it takes minutes, but don't forget and leave them in the fridge!

I'm sure there'll be more help along in a minute! Good luck.

In_Search_Of_Me

Welcome! No debt is to small and its all relative!! Well done for tacking things BEFORE they got to levels of debt like mine! Much better way of doing it! Re your SOA - Gas & elec seem quite high, as does home insurance - can you reduce these (see on site for ideas); batch cooking & freezing are good and I am a convert (made muffins & pizza the other day!!) and now quite enjoy it & its SO much nicer than brought food...you'll find a spending diary is great at keeping you on track and at least if you go of track you're aware you're wobbling!! Good luck & welcome to a new, better & cheaper way of life!