Doing something about it.

Kamaya

Hi all,

I'm new to this forum, but I'm also new to asking for financial advice.

As a result of a wedding & honeymoon going over budget plus other unforeseen circumstances, I currently have a balance of just under £7.5k on my credit card. As it currently stands I'm paying off the minimum payment plus a token couple of quid - a drop in the ocean really.

I've now decided to do something about it, as the repayments are taking up a substantial part of my wages.

Basically, I'm after advice on what to do next. As far as I know, my credit rating is solid, having never missed a payment on credit cards / loans / mortgage etc. I've replaced my car with a cheaper one (£35 year tax & 60mpg), and really cut down living expenses etc, but it's not reducing my balance.

I was thinking about moving half the debt onto a 15 month 0% APR, balance transfer credit card (2.9% fee), and the other to a 3/4/5 year loan. So, I've got a fixed outgoing for the loan, and any spare money at the end of the month I can put towards the balance card without accruing large amounts of interest.

Has anyone been in a similar situation, who can offer advice? (Other than matching 6 numbers on the lottery!)

Thanks in advance.

K.

DEVONLIFE_2

Hi
Best thing to do is to post a SOA (Statement of affairs) people can look at this and point you in the right direction. DL.

Happytogetdebtfree

what about just transferring some to a 0% credit card if you can, and then doing the same again when the 0% is due to end depending on what you have free to pay means you can get the credit card down, a loan might be a waste maybe you could do to post a statment of affair good luck and well done for posting

Kamaya

Thanks for the quick reply... I'm new to this, so what is a statement of affairs? Is it a summary of my in & outgoings?

Tixy

Kamaya wrote: »

Thanks for the quick reply... I'm new to this, so what is a statement of affairs? Is it a summary of my in & outgoings?

Thats right - we recommend this as it also list your debts etc - http://www.makesenseofcards.com/soacalc.html

If you post on here people may be able to make suggestions of how you can free up more money to pay the card off quicker. Or we can see whether the idea of moving the debt to other cards or a loan might work/be feasible.
Do you have any open credit card accounts with no balance on at present?

Welcome to the forum by the way.:)

Kamaya

Ok, I'll have a look at that later, thanks.

And no, I've just got the one credit card. I'd only start another to clear off & close my current one.

Dinah93

I wouldn't recommend swapping a credit card for a loan, the required payment on the CC will be lower - overpay to make it the same level as the loan. But nothing is going to change tonight, you sound like you're not in a crisis where you can't make the minimum payments, so as others have said, don't rush into anything, there are a lot of knowledgable people here, and the next step is to post up your SOA so we can advise you better x

Kamaya

That's a really good point about making the payments up to loan standard. But I think I'd be accruing more interest?

I'll fill in the SOA, and put it up later/tomorrow.

Thanks for your help all.

Dinah93

I've never actually had a loan, always credit cards, but I think I'm right in saying they're a secured debt, and you can rarely overpay without penalties. If you circumstances were to change for the worse and you couldn't make the payments you'd be in much bigger trouble. Equally if your situation were to improve and you could pay the debt off sooner, this would not be possible without large charges. I'll pop back tomorrow have a look at the SOA.

Have you applied for a 0% card? You might get a larger limit than you expect. Alternatively if your credit history is good, you could apply for a second 0% deal, or a low rate life of balance transfer card.

Kamaya

Right then, I started doing my own SOA last night, jump simply listing all my outgoings. I can't believe I didn't do this before, and was surprised where my money went:

I managed to:
- Save £110 *A MONTH * on mortgage, gas, electric & other utility bills
- Save £10 * A MONTH * on pet insurance
- Save £4 * A MONTH * on car insurance
- Save £4 * A MONTH * on house insurance
- Save £3 * A MONTH * on TV entertainment package
- Save £11 * A MONTH * by switching from private to NHS dentist

So in all, I stand to be £140 - £150 better off a month just by the above cut backs!! That means that rather than meeting the minimum payment I will be able to start paying the CC off over £100 a month!

I've noticed on my CC that they are actually charging me an extortionate £60 a month on payment protection - which I've never had before, or requested. So that will be the next step.

I've also put a business case together for a salary increase, as my current salary is only around 85% of the average pay for my job role. Fingers crossed!

Thank you for all your messages of help & support, as I've been burying my head in the sand in terms of this, and I guess I was embarrassed to talk about the 'D' word with my friends & family.

Kamaya

Just quickly, I am still thinking of getting a 0% APR balance transfer card, just to enable me to pay the balance off quicker!