should i get a loan to repay credit cards? SOA added

Flipped27

I think my plan is to use one account for all direct debits, including minimum payment on credit cards. This will be where all salary is paid in.

Have another account where the tax credits (£125 a week) are paid into - pay £25 a week from this one into other account to cover all dd's and then live on the rest - food, petrol, school dinners, trips, haircuts, everything. And once its gone its gone, and aim to pay at least £50 a month extra into credit cards?

Am i being delusional?

Flipped27

Just wanted to add that myself and partner always use shower and not bath and three children share baths.

SWW are totally ridiculous in their fees, we have to pay for all beaches down here too apparently, I think they are the most expensive water company.

Just so you all know that we do try and save water as much as possible, they are just thieving so and so's........

Flipped27

Because we are going overdrawn every month because of the £100 charges, which incurs even more charges.........

Not that complicated if we have two accounts but only one that we use - then we know the other is just for direct debits and we can't touch it, but we also know there in NOTHING coming out of the one we use for shopping and kids etc.?

Chrisblue1962

Hi Flipped27,

You need to firstly do the following:

List the balances of each card, together with the APR, amount due each month (£) and percentage of balance due each month.

Then, see if you can do either or both of the following:

a) Balance transfer to lower APRs so that amount of interest charged will result in having to pay less.
b) Balance transfer to cards which request lower minimum payment BUT has same or lower APR as this will result in lower payment.

If you have ANY spare cash, pay this off card which has highest APR and keep the payment at this leveljust pay minimum off other cards. This will start to pay off most expensive debt first and eventually free up cash to pay off other cards This concept is called "Snowballing"

Hope this helps.

Flipped27

Thats my point - it will stop us going overdrawn (by that I mean over the £2k) if we know exactly how much is coming out for bills and know thats it, then we know, with our wages and £25 a week from tax credits it will cover it.

The £100 is debit interest of around £22 and then fees, we are going over our limit so often its often £100 PLUS the debit interest. But because we are always in debit, we can never truly see where we are with money. (Apart from in the sh*t)

We don't have an overdraft on our other account, so when we get our £100 a week, we would know that its for food, kids etc and that is all we have.

I think that what i am trying to do, is take control of it a bit more, I know we are really bad and look at our account and see -£1200 and think, oh we have £800 until payday........thats been our logic. I just thought maybe we need to go back to basics, we have £100 a week, no spreadsheets (tried it) just a simple bank account, no overdraft, credit cards cut up.

It sounds like the best thing to do in my head......

Once I have got the kids in bed, I will do another SOA with up to date APR's on them, and will have a look at snowball calculator.

Thanks

Flipped27

Chrisblue1962 wrote: »

Hi Flipped27,

You need to firstly do the following:

List the balances of each card, together with the APR, amount due each month (£) and percentage of balance due each month.

Then, see if you can do either or both of the following:

a) Balance transfer to lower APRs so that amount of interest charged will result in having to pay less.
b) Balance transfer to cards which request lower minimum payment BUT has same or lower APR as this will result in lower payment.

If you have ANY spare cash, pay this off card which has highest APR and keep the payment at this leveljust pay minimum off other cards. This will start to pay off most expensive debt first and eventually free up cash to pay off other cards This concept is called "Snowballing"

Hope this helps.

Thanks, I think we have reached the point of no more balance transfers now as cards mostly maxed out.

Is it ever a good idea to pay off one with a smaller amount on first so that we can transfer some of the balance of the higher APR card?

Or always best to go with higher one first?

Flipped27

I think my level of debt pretty much proves that, at least for now, I can't control my spending! I think I fail to see credit cards as they really are, more of a one stop shop. Can't afford to go out? Well, i will do the weekly shop on my credit card and voila money for entertainment!

If i haven't got them to hand, I can't do it.....

On the spreadsheet, how do I start it if I am constantly in the red in my account? Thats what I can't figure out, I am in a vicious circle, I start being really careful, stick to my budget, then the fees from last month take me over again this month and incur more charges for next month?!