advice please

ukjasmine

Hi,

I am after some advice and have been informed this is the best place to come to!

I currently have £2k on a credit card and my current account is in the overdraft (-£2.5k). I am desperate to get out of the situation I am in.

I am lucky enough to soon be receiving £1k bonus from work (before tax). I am able to pay off a max of £200 a month.

Please could you advise me on the best method to pay off this debt?

All advice welcome. Thank you in advance.

J

leanne82duke

i would recommend looking at the snowball calculator it shows you the best/cheaper way to clear your debts x

http://www.makesenseofcards.com/snowcalc.html

it is really straight forward, but if you need anymore help let us know x

GeorgeUK

How much interest are you paying on the card and overdraft?

Have you tried to get a 0% credit card offer from Virgin or similar?

ukjasmine

My current a/c is with Natwest and looking on their website, it looks like it is 1.48% (nominal monthly rate), 17.73% (nominal annual rate) & 19.24% (EAR% variable).

My current credit card is with Virgin and is 14.48% APR.

My OH suggests I move all my current debts from the current account and the existing credit card over to a new credit card which has a 0% interest charge.

Is this the correct thing to do? and if so, could you suggest a good credit card to go over to?

Many thanks
J

foxgloves

Hi Jasmine,
What worked for us, and then made paying off the rest of our debts much easier was getting our current accounts in credit.....or if not in credit, at least solvent at the end of each month. You need to set a monthly budget which is realistic but also pretty tight so that you can pay off your current debts & stop you running up any more. I know from experience that you don't have to overspend by that much each month to have a hefty deficit by the end of each year. I found it was much more difficult to budget when our current accounts were overdrawn (we both had quite big overdrafts) so we paid those off first so that then when our salary cheques went in at the end of each month we both knew exactly how much money we'd got to pay everyday expenses and how much we'd got leftover to chuck at reducing the rest of our debt (3 cards & also some loans). I was surprised how much easier having a current account in credit made this task. I suppose it got rid of the feeling that monthly pay is just disappearing into a black hole and also it meant that we could see EXACTLY how much money we'd got so that we weren't having to work in minus figures (me) or sticking head in sand & acting as tho' overdraft is actually additional income (partner). As soon as we got overdrafts paid off, we then targetted the rest of the debts in order of highest interest rate & then snowballed payments into other debts as we went along. So, my overall advice as an almooooosssssst debt free girl is to get rid of the overdraft first & apply a strict monthly budget which should allow you to tackle the rest of it. And, Jasmine, good luck. It's a good feeling when they start to go down, I can tell you.

GeorgeUK

I think getting a 0% card would be the best way to sort the debt. As foxgloves says though, you should also be dealing with the rest of your expenditure at the same time to make sure you don't fall back into relying on debt.

My debt is from gambling too - take a look at the link in my sig if you feel gambling may be a problem for you - there are a few different ways you can try to deal with it.

One thing to note though is that if you have used the credit card for gambling, it won't be the standard rate you are paying, but a higher cash advance rate.

So, in short, taking a look at your monthly expenditure and keeping a spending diary would help you to sort this out and keep you from going back into debt. The snowball calculator is good for this - you can format it for MSE and post it up here if you want us to take a look at it.
https://www.makesenseofcards.com/soacalc.html

For the credit cards, most won't allow you to tranfer to any other account than a credit card, so to do a 'super balance transfer' you will need to use one of the cards that allows money transfers as part of the promotion to deal with the overdraft.
http://www.stoozing.com/sbt.php
Personally i would go for either the post office classic (1st choice) or the egg card as the other top ones seem to be issued by MBNA and your Virgin card is already an MBNA card.

You can usually have about 3 credit checks in a 6 month period before your credit score is affected and it is usually best to space out applications so that it doesn't seem like you are desperate for credit.