Help (desperately) Sought with SOA and Shifting Credit

DVardysShadow

sanctuary wrote: »

... Your suggestion for keeping a spending diary for 3 months is a good one - I don't think 1 month would give a clear enough picture.

I suspect you will have a very good idea in about 3 weeks, but it will take 3 months to get on top of it assuming everyone is singing from the same hymnsheet.

Verbatim

Hi sanctuary,
I've just read through your thread and wanted to say that putting c card debt on to a mortgage is NOT generally recommended on here.
1. You're converting unsecured debt into secured debt so that if business problems, ill health or unforseen circumstances arise down the line and you can'y keep up with the payments your house is at risk in a way that it isn't with unsecured card debt.
2 Mortgages run for decades typically so although the APR will be lower than those of the cards over the course of the mortgage term you will probably pay more not less.
3 there is a tendency to think "problem solved" and continue the same spending / lifestyle leading to further debt but now with less equity /security.

As others have said with your income and just a few changes you could be out of debt quickly with no long term ill effects.

Good luck whatever you choose to do and I'm sure tackling things will continue to feel good.

sanctuary

Thank you for your response, Verbatim (and everyone else!). Yes, I agree that moving my CC debt over to my mortgage is not ideal - but I'm not having a lot of luck in lowering my interest rates.

I phoned two of my CC providers this morning and asked if they'd lower my interest rates. Both said no.

So I've just applied online to Barclaycard with a low fixed rate for the lifetime of the debt. The "instant decision" came back as: We need more information. I was expecting this because (1) I'm self-employed, and (2) although I've never missed a payment, my history won't be perfect because last year there were several late payments.

So, I'm waiting for Barclaycard to phone me back. In the meantime, I am continuing to spring clean my direct debits and shop around for better deals on all utilities, insurance, etc. Annually, I reckon I've already saved us £5000 for 2010 - but the most pressing problem as I see it continues to be these stupidly high CC interest rates that I want to shift now.

Further advice/suggestions gratefully received. (Would it be worth posting my dilemma on the "Credit Card" forum?)

Butti

Sanctuary

Did you use the payment from BT to pay off HSBC. If your balance with them is now 0, have you approached them for a balance transfer. Didn't know whether you had covered this.

B

sanctuary

Hi Butti - that's a great idea! The BT refund has not hit my account yet; I'm told it should be there by this time next week. I do indeed plan to pay off the HSBC card in full at that point, but when I talked to them this morning they were quite adamant about not offering free interest on balance transfer to existing customers (or spouses). It's still worth a try though if I can't find anything else!

sanctuary

Sorry to bump my own thread ... I'm fairly new to posting so apologies if this is not good "MSE etiquette".

With all the helpful suggestions I received on this thread in response to my SOA, I've made great progress is bringing down my monthly outgoings. However, the one key area I've had *no* success in is finding an alternative to those blasted credit cards.

Since I last posted on this thread, I applied for a Barclaycard Simplicity. They didn't give me an instant online decision - said they needed more info - so I was surprised when a card turned up in the post a few days later. Although the credit limit was very low (£1500) I was encouraged that this might bode well for applying for additional credit with a view to transferring my balances of nearly £18000 to lower interest cards.

However, yesterday I received a letter from Barclaycard basically saying they'd changed their mind and had closed my account.

I am now fearful of applying for more credit in case I cause (further) damage to my credit rating.

If credit card balance transfers are not currently an option, what would the Debt-Free Wannabes experts suggest next? From what I've read, I figure my options are:-

1) Stick with what I've currently got and snowball; and at the same time work hard to improve my credit rating so that perhaps in a year I can try the 0% BT options again.
2) Speak to my mortgage lender (though the consensus on this is clearly mixed which makes me feel wary)
3) A non-mortgage-linked consolidation loan - either through my bank or another lender.

Any advice would be very gratefully received. I am more than happy to make many sacrifices to bring my outgoings down and increase my incoming, but I want to ensure I am doing all I can to address what is the most significant problem I have in dealing with our debt.

consultant31

Not much help to offer on the credit cards as I try not to use them, but a significant saving could be had if you dump the Sky package and have you thought about getting a water meter. My Mum's water rates used to be £48 a month until she got a meter and it's now dropped to between £9 and £12 pm :eek:

TheBex

Hi sanctuary,

I'm afraid I can't help much with the immediate question but I do have another thought - if you can transfer it all onto your mortgage, you could save that amount up in a "sealed pot" type of account ready for when you renew your mortgage and then pay it off at that point.... Then you avoid the pitfalls of both the mortgage solution and the snowball solution. However this will take a lot of discipline, and until you know exactly what's happening to your money that might not be for you.

I wonder if your bank accounts are joint? If so then could it be your OH who is causing this money leak? (not in a mean or accusatory way, but if he's often spending money on bits and bobs it could add up to more than you thought or budgeted for) How old is the child in the house? Are there expenses associated with him/her that you've missed? Or, have you been paying for unexpected things - parking fines, emergency home repairs etc etc that have eaten away the money?

Obviously you've already been told to keep a spending diary, but I'd be intrigued to know where it all goes - you'll have to catch us up because it's a huge amount to "lose"

Bex

broadpaws

hi sanc,

apolgies if you had already answered this, I have read teh thread, but sometimes scan read, if you cannot get the balance transfer and I would also be reluctant to advise you to "pop it onto the mortgage" could you sell one of your cars - and if you have to have 2 cars, get yourself s reliable "runaround!" then you could use a lump sum to hevily reduce/clear one of those high cards, this would mean you could really throw a lot more at the remaining one?

BP x

sanctuary

Thanks for your further feedback/advice/support - it really is hugely appreciated, and all your suggestions and questions have given me much food for thought.

OH is definitely not the problem. He is very frugal. I'm afraid the household finances are primarily my responsibility. So are the business accounts - and I'm proud to say I've handled them with great care. The debts associated with our personal finances have not been an overnight thing ... a steady accumulation over ten or so years. Like others who are fortunate enough to enjoy above average earnings, I clearly overspent consistently.

Broadpaws, your advice is definitely good ... we've already decided to sell one of our cars and buy something a lot less expensive.

TheBex, oldest child has indeed been an expense over the last few years - but not anymore. I have finally learned to put my foot down, for his good as well as my own. Now he is working for us for six months in exchange for room and board; it's a good arrangement for all concerned, as he also has a weekend job which gives him his spending money (and some savings too during his gap year).

15 days into the spending diary and it is proving very interesting indeed. One thing I couldn't have anticipated was this FREEZING spell and the extra £ it has cost me in heating and medicine while we've all been ill!

Transferring the debt over to our mortgage looks to be something I might have to consider unless I can locate another way to consolidate.

Thanks again for your feedback.