Helping a friend with C/C's - Where to start?

Hot_Potato

Hi,

I have a friend who has got herself into a little strife with her debts, and I have stepped in to try and help.

Below I have listed her debts with as much information as I have. She doesn't really understand the in's and out's and has only allowed me to cut up and return the two Barclaycards and two Natwest cards so far, along with a letter asking if they could possibly freeze the interest... She is a pensioner and doesn't have allot of income, and is raiding her £67k bond every month or so for living on and not paying off any of her debts. She then only has £400 a month from her ex husband and £112 pension coming in. She is only paying the minimum of anything that she has to...

She is expecting a cheque for just over £2k in the next week or so and also £1k from her bond... I just want to make sure I am giving her the best advice and support I can so thought I'd put it out to all on here... She contacted the CAB, but she really doesn't want to disclose the 'information' that they need...

As at Jan 2010

Natwest Mastercard: £10,000 limit, £4,392.02 outstanding, £98 min repayment

Natwest Visa: £10,000 limit, £5,157.68 outstanding, £116.00 min repayment

Barclaycard Mastercard: £12,000 limit, £5,250.44 outstanding, £118.13 min repayment, 22.9% APR

Barclaycard Visa: £11,900 limit, £6,666.14 outstanding, £149.98 min repayment, 22.9%APR

HSBC Mastercard: £2,000 limit, £1,052.64 outstanding, £26.32 min repayment, 24.9% APR

John Lewis: £1,800 limit, £1,269.15 outstanding, £38.00 min repayment, 16.9% APR

M&S: £800 limit, £562.41 outstanding, £26.67 min repayment, 23.9% APR

Marshall Ward Catalogue: Outstanding £401.13, 39.7% APR

Northridge (Car Loan): £3,022.20 outstanding, £106.15 monthly payment, 11.2% APR

Any advice would be gratefully received.

vaporate

Didn't want to read and run but I guess it would make sense to pay off the highest interest loans first.

Marshall Ward Catalogue first. Make sure they are CLOSED for life afterwards and not used up again.

Any

That is some serious debt..
The advice of paying off fastest the cards with the highest interest is good.

What interest are the NatWest cards at?

I wonder how she managed to get so many cards as a pensioner in the first place. Obviously very good credit rating and some other income??

Once she receives the money I would pay off and CLOSE
The catalogue
HSBC
M&S

and the Barclaycards (unless the NatWest ones have higher interest)

Now - any chance whether she would be able to get new either 0% balance transfer or Life Of Balance card? Do you know how old are these cards? Any missed payments or anything?

Because if she could be able to get another card she could get card from MBNA family as she hasn't got one of those.
They do both Life of Balance card and Virgin 16mths 0% balance trasfer card.

vaporate

Any wrote: »

That is some serious debt..
The advice of paying off fastest the cards with the highest interest is good.

What interest are the NatWest cards at?

I wonder how she managed to get so many cards as a pensioner in the first place. Obviously very good credit rating and some other income??

Once she receives the money I would pay off and CLOSE
The catalogue
HSBC
M&S

and the Barclaycards (unless the NatWest ones have higher interest)

Now - any chance whether she would be able to get new either 0% balance transfer or Life Of Balance card? Do you know how old are these cards? Any missed payments or anything?

Because if she could be able to get another card she could get card from MBNA family as she hasn't got one of those.
They do both Life of Balance card and Virgin 16mths 0% balance trasfer card.

I'm a somewhat lurker on the natwest website and from what I can remember the interest is around 16-17%

http://www.natwest.com/personal/credit-cards.ashx

Any

vaporate wrote: »

I'm a somewhat lurker on the natwest website and from what I can remember the interest is around 16-17%

http://www.natwest.com/personal/credit-cards.ashx

Thanks, but that means nothing:) My OH took Barclaycard on 16.9% or something and while it still is "normally" that % for many others, his was put up to 24.9%.

The cards you take out are "variable" and they can change the interest if they want to.

Hot_Potato

Thank you for all your replies.

My thoughts were to pay off the highest interest rates first. My friend seems to want to hang on to the M&S and HSBC cards though - I really am having trouble making her aware that it is in her interest to pay the highest ones off etc. I guess any that we can get 'under control' will be better than nothing!?

I think the Natwest cards are around the 23/24% mark... I will of course find out.

I do say that we need to see if we can transfer the debt to 0% cards, but she insists that due to her lack of income that she won't be able to get any cards/loans etc.... I think she has missed payments, a few over Christmas, she wasn't able to post her payments because of the snow, and can't understand why they don't make allowances! She is a very intelligent women, but has never had to look after/worry her finances.

I forgot to ask - what are the chances of Natwest and Barclaycard freezing the interest - does anyone know?

I fear that things will soon get a whole lot worse, if something doesn't happen....

I did forget to add, that she is basically waiting for her mother to die (she's currently in a home, and has no clue about what is going on around her), and when she does, my friends financial problems will no longer be a problem. She has hedged all her bets on the fact her mother should have died by now, and because she hasn't, my friend is getting into trouble.

vaporate

Hot_Potato wrote: »

Thank you for all your replies.

My thoughts were to pay off the highest interest rates first. My friend seems to want to hang on to the M&S and HSBC cards though - I really am having trouble making her aware that it is in her interest to pay the highest ones off etc. I guess any that we can get 'under control' will be better than nothing!?

I think the Natwest cards are around the 23/24% mark... I will of course find out.

I do say that we need to see if we can transfer the debt to 0% cards, but she insists that due to her lack of income that she won't be able to get any cards/loans etc.... I think she has missed payments, a few over Christmas, she wasn't able to post her payments because of the snow, and can't understand why they don't make allowances! She is a very intelligent women, but has never had to look after/worry her finances.

I forgot to ask - what are the chances of Natwest and Barclaycard freezing the interest - does anyone know?

I fear that things will soon get a whole lot worse, if something doesn't happen....

Well, this is purely my opinion, but I would pay off the highest to the lowest interest rates in order and close each account as I go along.

Then try and save, IF possible. Better sleep at night I guess.

Again, just my opinion.

vaporate

Any wrote: »

Thanks, but that means nothing:) My OH took Barclaycard on 16.9% or something and while it still is "normally" that % for many others, his was put up to 24.9%.

The cards you take out are "variable" and they can change the interest if they want to.[/QUOTE]

Hmm this should be banned really. Unfair. No doubt they catch many people off guard. Hardly fair bank charges eh?

Any

Hmm this should be banned really. Unfair. No doubt they catch many people off guard. Hardly fair bank charges eh?[/QUOTE]

You can call them, tell them you dissagree and ask them to close the account - they will revert to your old % rate but you cannot use the account any more.

Many people are just not on top of their finances though, they don't read the statements properly or don't know what to do and so do nothing.

Any

Hot_Potato wrote: »

Thank you for all your replies.

My thoughts were to pay off the highest interest rates first. My friend seems to want to hang on to the M&S and HSBC cards though - I really am having trouble making her aware that it is in her interest to pay the highest ones off etc. I guess any that we can get 'under control' will be better than nothing!?

I think the Natwest cards are around the 23/24% mark... I will of course find out.

I do say that we need to see if we can transfer the debt to 0% cards, but she insists that due to her lack of income that she won't be able to get any cards/loans etc.... I think she has missed payments, a few over Christmas, she wasn't able to post her payments because of the snow, and can't understand why they don't make allowances! She is a very intelligent women, but has never had to look after/worry her finances.

I forgot to ask - what are the chances of Natwest and Barclaycard freezing the interest - does anyone know?

I fear that things will soon get a whole lot worse, if something doesn't happen....

I did forget to add, that she is basically waiting for her mother to die (she's currently in a home, and has no clue about what is going on around her), and when she does, my friends financial problems will no longer be a problem. She has hedged all her bets on the fact her mother should have died by now, and because she hasn't, my friend is getting into trouble.

Hmm, sorry to say this but your friend sounds nice:(

She won't be able to get any more cards or at least good cards if she had missed payments. Would also explained higher interests - banks don't want to lend money to people who don't manage their finances.

Good luck and I hope you have lots of patience - sounds like you will need it.

Hot_Potato

ok, the NatWest cards are 17.5% for the Mastercard and 18.3% for the Visa. Today I have cut up and returned the two Barclaycards, the two NatWest cards and also the HSBC card. My friend now jsut has the M&S and John Lewis cards...

She has mis understood me and thought by 'freezing interest' that they would take off any interest out of the balance and also allow her to pay what ever she wanted towards her balance each month (wishful thinking hey?). I'm not sure if she is any closer to understanding what I am doing as she now wants me to tell her how much her payments will be each month now the interest is (hopefully) frozen.... nothing like a demanding customer! So I'm about to see if I can put a spreadsheet together!

She also wants to apply for another credit card as she tells me her M&S and John Lewis cards can't be used outside of those shops??? I'm sure they can, but she's insists that they can't! So need to look into another possible credit card that she can use for emergencies!

The £2k cheque she is expecting, she won't use towards paying off the cards....

At least I'm doing what I can re the interest freezing. I just hope it's enough!?