Forum newbie seeks debt free status

wipemydebt!

Hello forum :beer:

I'm looking to change bank account, as well as reduce my credit card and loan debt. I think that by doing it all at once (or at least, a structured timeframe), I can optimise my finances and waste less money on frivilous spending.

I saw a recommendation for Nationwide as a bank account, and as well as beating my current bank Natwest, they offer a good loan deal which would make paying off my debts much easier. my credit history is a little iffy however due to frequent late payments, so I'm not convinced they would approve me.

Debts:
Natwest Credit card - £1500 @16.9%
Barclaycard - £1300 @ unknown rate, but anything between 16% and 28% :eek:
Capital one card - Only £200 max credit (This is what they gave me 5 years ago :rotfl: )

Egg loan - Around £5000 left @ 7.8% £220 p/m
Beneficial Finance (formerly a HP from HFC) - unsure, but around £5000 £150 p/m

Total debts: £370 + CC (CC tends to be minimum +£10-20, dependant on lateness)

typical spending a month:
Rent £200 (live with parents)
Internet £25
Magazines £15 or so a month (just taken out a 1/2 price subscription to one)
Anything else will be ebay, or other frivilous spending. Last month I spent £140 on paypal which was all games stuff :mad:

Total regular outgoing about £700

I earn roughly £250 p/w + overtime where avaliable. (commonly £1100 p/m)

As you can see, I'm spending a fair amount on stuff that isn't essential. A nationwide loan would bring my credit cards and loans all to a fixed £300 p/m (incl protection) over 5 years, and with the money saved I could start saving (if only to make extra loan payments) and I'd eleminate fees due to late payments. Assuming I get rejected, i'm not sure how I would go about reducing these outgoings.

I was looking to take a payment break on my Egg loan soon, and use the extra money to pay off some of the natwest card. I could half the card over 3 months, and that would make it easier for me to motivate myself into paying it off. Alternatively I can pay off the barclaycard, as they have been reducing my limit, but the natwest card is due the week after my egg loan, which probably explains late payments.

I'm already looking at reducing unessecary spending, but it's proving hard to resist. Ebay is the main cause, so I'm looking to try and cut that out from the equation. I also have some stuff I am trying to sell, but it's proving difficult to get a acceptable price. If I can sell the stuff, then the natwest card would be destroyed if assisted by the egg payments.

I will have 2 weeks wages this week, as I am on Holiday next week (i'm not going anywhere so spending will be minimal), so I could annihalate the £200 card, or just throw the money at another card. I can't use all of it though as I have a bill due the next week :rolleyes:

Sorry if thats overly long or confusing, but any advice would be apprciated Do I work on the current debts first, or move them to something better? (taking into account the late payments)

CLAPTON

well done for posting and seeking advice.

before you consider moving your debts around you need to get your spending under control and stop missing payments on your loans.

Firstly draw up a proper budget that you can live on ...be realistic and allow some going out money ....As you are living at home you should be able to repay your debts regularly and still be able to live reaonably.
Keep a spending diary, where you write down absolutely everything you spend and see where the money is going ...

Set up standing orders or direct debits for the minimum monthly loan repayments so you dont forget to pay them.

Once you have got control of your spending then concentrate on paying as much as possible onto the credit card with the highest APR interest rate.
I see no point at this stage in taking an payment holiday on the Loan unles you are absolutely determined to use all the money to pay off the credit card and no use this as an excuse to spend more on ebay or whatever.

Can you do over time or get a parttime job to increase your income and so pay off more of your debts?

wipemydebt!

Thanks for the reply.

I sent off a direct debit form for my Barclaycard this morning, and will do the same for the natwest card when I get a new form (I managed to screw this one up...). I also paid both bills today, with the Natwest bill being 2 weeks early

I'll work on a budget, which I think would be easier to keep to if I sort out some online banking so I can move any spare cash straight to a card payment. I can't see any reason not to move my banking to nationwide, so I can set up their online banking as soon as my account is opened. I guess I can apply for one of their loans once I've reduced what I already have.

With regards to the payment holidday, one idea I had would be to write out three cheques, all dated for the week after each payment usually is. My Mum usually physically pays the bills as she is usually in the vicinity of the banks on a daily basis. If I give her the cheques, she can pay them in on my behalf around the due date (the timing of the loan and the card due date means the money will show up as payment towards that very statement, so I'll basically be 3 weeks ahead with payment.)

Part time job isn't doable as I work shiftwork and work nightshift a lot. That rules out saturday, and I need the sunday in case I need to adjust my sleeping pattern. I already take pretty much any overtime offerred, I just need to make it count.