Cut up the first credit card

Pablosammy

First off, I'm not looking for any sympathy, I bring home a decent amount a month and it's my own idiocy and looseness with the ol' CC that got me into debt. However, it's still an upwards climb to break free of those shackles and I thought putting it on a forum might make it 'official' in my head!

What scared me was a single '2' late payment notice put on my file, when a couple of DD's tried to be taken from my account which was at the bottom of my overdraft. Suffice to say, I'm worried I've wrecked an otherwise excellent credit rating. I've had no credit searches since (none in the last 3 months), and want to clear my debt to get it looking good again.

So... debts:

Overdraft: £400
Amex: PAID and cut up!
Alliance and Leicester CC: £4,100 (mainly an engagement ring - she said yes! :j)
Alliance and Leicester Loan: £7,000 (£233/month)
Car loan: £5,000 (£139/month)
Student loan: £21,000 (£160/month)

Total debt: £37,500


Ouch. Now, I know a Student loan isn't a scary debt in the same way a CC debt is, but it's still £160 out of my pay packet every month. Put it this way, I'll feel a lot better off without it, but it may take a while to get rid of.

Well, I'm selling my beloved camera kit. It's just not seeing enough use to justify it's value. I might buy a small replacement in the future, but for now it's made me £2100, which has allowed me to pay off my Amex card. I should be able to bring in another £1500 or so from the remainder, which will go against my main credit card.

Priorities-wise, the A&L CC needs getting rid of, although I'll keep it as my 'every day' CC once paid off. Then... car loan or A&L loan? Similar amounts, but A&L take a lot more per month. But much less of that is paid as interest, due to the maturity of the loan. So that's a dilemma, paying which one off will make me better off in the long run?

Anyway, thanks for any advice.

Kind regards,

Sam

Tixy

Hi Sam

Have you looked at the terms of each loan to see whether they both allow overpayments? Presumably you've compared the APRs?

Have you used the snowball calculator to compare the interest you would pay etc
http://www.whatsthecost.com/snowball.aspx

Well done on the debts paid so far.

Pablosammy

Yeah, the snowball calculator is excellent, I'll be bookmarking that. However, it did wake me up to how long this might take!

The A&L credit card is easily the highest APR, at 14.9% I think. After that, the car loan at 12% and the A&L loan at 6.25% (back when my credit rating was top notch!).

I'll look into overpayments once I've cleared the credit card, but I'm not holding out any hope. Thanks for the advice, regardless!

Cheers,

Sam

gonzo127

hi and congrates on facing up to your debt,

on top of Tixy's advice i would also suggest you do a detailed and honest SOA (statement of affairs) http://www.makesenseofcards.com/soacalc.html and post it up here so we can try and advise you of areas of potential savings in your everyday expenditure which would help you pay back your debts quicker

Pablosammy

I bring in about £2,000 pcm, which includes my student loan payment taken straight from my payslip. My partner brings in £2,500, but our debts are separate for the time being.

All of our rent and bills, and most of our food, is paid for from a joint account which we both pay £800 pcm into. My outgoings are thus as follows:

A&L loan: £233.96 (6.25% APR)
Car loan: £139.51 (12% APR)
Overdraft usage: £5 pcm
Phone: £35 pcm
Gym: £24
Misc (entertainment etc.): £100
Clothes: £100

So... that's £640, which should leave £560 to pay towards debts. Simple?

My achilles heel is big payments I think I can afford... cameras, laptop, lenses... Stupid needless gadgety things that I really can't justify. If I can cut out these, I'll be sorted. I'm a spendaholic, and that's where my problems lie - call this my 'lightbulb moment'. I'm selling the camera stuff, and reigning in on the needless crap.

I'll let you know how it progresses!

gonzo127

now although this is money saving have you thought that instead of getting rid of your camera equipment fully so that you cant do any, to actually use a small amount of it to buy something like a bridge camera (panisonic lumix FZ38 springs to mind ~£250) so you can at least do some basic photograph? i only say this because going cold turkey on something usually doesnt work and when it comes to spending usualy means you end up not spending something for a month then spending 3 times as much the next month

the other one would be to get a seperate bank account and transfer a set BUDGETTED amount into it each month as a 'treat fund' which will still allow you to buy some of your gadgets without overspending that month?

slig

£100 per month is a lot to spend on clothes each month. Well, its a lot when you in debt; that's £1200 per year! Can you cut back?

Have you tried doing a full SOA yet, either to post on here or just on for your own information? The little things really add up (especially if the little things are camera lenses and the like ).