Dealing with Credit Card Debt - Next Move

dan52310

Hi,

I was hoping I could get some advise on what steps to take to clear my debt.

I currently have no loans and 2 credit cards:

Barclaycard £4000 (limit = £5000) @ 15% APR
Thomas Cook £1000 (limit = £1500) @ 25% APR
I also had an £500 on an Egg card but I have paid this off and just cancelled the account.

My fiancee has no debt and we are looking to get a mortgage this year and buy a house.

I know paying off debt is the most important thing but paying off the 5k before buying a house isnt really an option we want to take (it would take me over a year).

I was thinking of paying off the £1000 @ 25% and cancelling the Thomas Cook card. Then maybe getting a loan to pay off the remaining £4000 on the Barclaycard. This way I could commit to a monthly loan payment and also save for a house / pay the mortgage.

Another option would be to try and get a balance transfer to a 0% card.

My credit report seems ok, I am on the electoral roll, have lived at this house (parents) for over 10 years, have had a good amount of credit that has been settled succesfully in the past (phone contracts, loans etc) but I have had 3 missed payments in the last 36 months. I missed 3 non-consecutive payments between 6-12 months ago and im worried this will stop me getting a new card at 0%, particularly because that would mean I would have £4000 on a new card but still £5000 available. I dont want to use the Barclaycard and will cancel it once the balance transfer has gone through but i assume I cant guarentee this to the new credit card company and they will judge my case as if I will still use the £5000 available to me. If that makes sense?

I earn £24,500 (+ £2500 guarenteed bonus)

Could anyone please shed some advise on what my next best move is.

Any help would be appreciated, thanks in advance.

clang_uk

B/Card offer a simplicty card, at 6.9% you should look at moving your account onto this. Or even better a 0% CC I know that this can be a bit of a pain but worth it. Can your other half help pay some off. It's not (in my opinon) worth getting a loan, as this will just hang over your head, and you can rarely overpay these.

Its worth doing an SOA to see if we can help you save money along the way!

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

Tixy

Hi Dan

You are right, they will judge you that you still have that credit available to you.
If you are thinking of getting a mortgage (and cannot pay off the debt before then) does this mean that you already have the deposit saved for a house? (not being rude but just wondering if the mortgage idea is realistic at the moment).

Can you confirm that you don't have a default on the account with 3missed payments.

How long will it take you to pay off and close the Tcook card?

Agree with clang that a statement of affairs might help you work out where you can make savings and how much you can actually afford for debt repayments.

dan52310

Sorry maybe I should have made things a bit more clear.

We do have £7000 as a deposit. We need another £3000 or so so there is still a lot of saving. This was a gift from her family so I don't want to use this to pay off my debt. I also don't want to use her money to help me pay it off. I know you could ask the question why I don't feel comfortable with this if we are moving in together but it's not an option I want to consider.

I don't think I have defaulted, it doesn't mention this on my credit report. On my credit report it says 3 missed payments in the last 36months. These were at least 6 months ago, were not consecutive and were payed a few dates lates. They were down to neglect on my part - I have now set up direct debits.

Is this likely to stop me getting a new card?

I think it will take me around 4 months to pay off the Thomas cook card and cancel it.

Tixy

Sorry you did say non consecutive I forgot what I had read when posting. If you had a default it would show (and its not that likely for 3 missed payments if not in a row).

In truth it will go against you but doesn't mean you definitely won't get a new card. Does your own bank offer a 0% card? might be worth trying them.
Are you financially linked to OH? any joint accounts etc? if not and if you can't get a card you could possibly (with caution) consider seeing if she could to move your debt to -providing you both understand the implications and I would draw up a simple agreement between you as well.

Understand about not wanting to spend that gifted deposit money.

Hopefully you can find some places to cut back on expenses (just for the next year or so) to help you pay more off your debts and make your savings for the deposit. Do you live together at the moment? rent your own place? would it be at all feasible to move to one of your folks just for 6months to help with the goal of getting a house?

Good luck with things.