Next Steps?

defaultworry

Hi folks, I posted a few months back outlining the following:

http://forums.moneysavingexpert.com/showthread.html?t=1935695&highlight=

Just an update to the money I owe (money in hasn't changed):

Unsecured Debts
Description....................Debt......Monthly..APR
Egg Loan.......................3381......102......7.9
Egg Credit.....................0.........0........26
Virgin Credit..................1100......60.......26
Barclay Card...................0.........0........6.8
Shop Direct....................1445......66.......0
A+L O'draft....................2500(avg).0........£5 usage fee
BOS O'draft....................2100......100......£30 usage fee
BOS Card.......................0.........0........26 (closed)
Total unsecured debts..........10843.....328.......-

I have a surplus of £400 each month (on top of the monthly payments above) to pay off bills.

I've been rejected for new 0% deals (not sure why) and Barclaycard have refused me a balance transfer (wouldn't tell me why). I think it is because I have applied for 3 cards in the last few months and am in the rejection spiral.

My question is where should I go next? I thought the Virgin Card is the next thing to pay off but the BOS overdraft is basically a 30% charge each month. I'm not sure what to pay off first and I'm open to ideas about how I can get both of these onto a low % card to avoid the heavy interest/fees.

Thanks

Tixy

Hi

I expect you have been rejected due to your level of debt compared to income. If you have unsecured debt of more than 50% of your income you are unlikely to get further credit these days.

Have you used the snowball calculator? This will come up with the most cost effective way of repaying your debt.
To me it looks like your BOS overdraft is working out at roughly 18% APR. Therefore I would target your virgin card first. You should have repaid this in 3months.

After the card has been clear for a month you could see if they will do you another 0% deal or a low life of balance deal and could then consider moving your overdraft over (by doing a super balance transfer) - you would need to cost out if it was worthwhile by comparing the fee you would pay to transfer to the charges you would pay before its repaid. Bearing in mnd by then you will be able to pay the £100 you already pay, the £400 spare and the £60 virgin will have freed up.

You should be able to pay off both the virgin cards and both overdrafts in a year. This will leave you with just the egg loan which is on quite a good rate and the Shop direct which is interest free.

Once the overdrafts are paid I would suggest you cancel them.

Good luck

defaultworry

Thanks Tixy!

I have previously used a snowball calculator but forgotten about it. I'll plug the details into one and see what it says. Although I've made some decent progress in the last few months it is hard to keep focused and know what to pay next.

Thanks again.