Looking for Credit card advice

eternal_nomad

Hi everyone,

I've been lurking for a while but thought I'd pop on and say hello and maybe see if any of you guys could offer any further advice.

I'm around £3300 in debt right now in 2 overdrafts - Bank A - £1500 and Bank B - £1800. And obviously my biggest concern at the moment is that I am paying massive amounts of interest on the overdraft balances.

I had originally tried to apply for a personal loan with Bank A to cover the two of them, but was declined.

I have also recently tried to apply for a Virgin Credit card, to take advantage of the 0% on BT's offer, but was declined.... I notice many people have said it can be qutie difficult to get a Virgin card if you've not had much of a Credit history in the past.

I have had various store cards over the past few years, only 2 of which remain open... Of those two only one is used (although rarely now) and the other one is in the process of being closed.
I've had one credit card in the past but never used it and it's also now closed.


I'm not entirely sure where to go next... I have checked my credit report from Equifax, and there doesn't seem to be anything too bad on there, it shows a couple of defaults from a couple of years ago, no real black marks or anything.


As it stands, my wages are being paid into Bank A and I do all my day to day spending on a debit card from that bank...
My only other thought is to apply for a 0% spending card, then do all of my spending on that for a few months, and use my wages that are going into bank A to pay off the OD in bank B... obviously I know it's a longer way around it and would mean I am still paying interest in both ODs, but the amount is gradually getting reduced until in around 6 months time I have only 1 Overdraft, and the debt from the other is in effect now on the 0% spending card.

At that point, I would close Bank B, and then I could then start doing the same with the OD on Bank A. At the end of the 0% Spending period I apply for a 0% balance transfer card to move the full balance to. So in a year or so all of my debt would then be on a new 0% BT card and I am now paying no interest on my debt.

I know it sounds long winded, and i hope it all makes sense. I know I'd still be paying some interest but at the end of the day, It's less than if I just did nothing.

I am looking at the Tesco credit card for my 0% Spending card.... has anyone else recently applied for this...?
How easy would you say it is to get one?

Any advice anyone can give would be most greatful.

Kind regards

eternal_nomad

CLAPTON

what's your income

what are the APRs of your ODs
how much interest is being charged on the ODs each month?
how much are the OD decreasing each month

eternal_nomad

Hi Clapton,


My salary is around £17,500 (around £1100 after deductions each month)

Bank A = 17.9%
Bank B = 18.9%

Amount of interest paid on each OD varies, usually around:
Bank A = £20-£25
Bank B = £35

I'm not managing to reduce the ODs at all at the moment because any extra money that could go towards reducing them gets wiped out in interest payments.

Thanks

Savvy_Spender_South

Have you thought about a collection that works for you? there are 0% as you know but beyond that there are incentive cards

I am working for Airmiles so i have an AMEX Airmiles card which pays 1 mile per £10 spent.
Other favorites include TESCO paying 1 club card point for every £4 spent.

Tesco also offer 0% on transfers and are easier in the main than Virgin to get onto

Helpful?

CLAPTON

a couple of defaults from a couple years ago??
I'd call that very very bad news rather than 'no black marks or anything'

I would suggest you look at your income and spending and see whether you can cut back; £50 a month is no a massive amount of money
try http://www.makesenseofcards.com/soacalc.html as a good format

I would be suprised if anyone gave you a decent credit card but you never know so yes, try for a purchase credit card as this would reduce the interest charge
Howver, if all you pay off each month is £50, then even if the 0% CC lasts for a year, you will only have paid off 600 before you will be hit with posible APRs of 25% or more

maybe consider if you can increase your income; part time work maybe?

eternal_nomad

Thanks for the advice Clapton,

I've just checked my credit report again, and it shows a total of "4 payment"s" 1 month in arrears" across two accounts, so perhaps 'default' was the wrong term to use. (Sorry, I'm quite new to this so don't know all the terminology... does 'arrears' differ from 'defaults'?)

Otherwise, I'd say my credit record is pretty clear. Mind you, as I have said, I'm quite new to this, so perhaps you have a better idea of it than I do.

I am always on the look out for extra part-time work, though as I work full time (and any Overtime I am offered) already, and am studying part time towards a masters degree (funded by work luckily) time isn't readily available.


Savvy Spender South, Have you applied for a Tesco card yourself? Based on what I've outlined of my credit report and income etc. do you think I'd get accepted? I just don't want to apply, and like I have had with Virgin and with the applications for the bank loan, I get declined again as I am sure that will make a difference to my credit report.

MFWannabe

Hi
You may be getting refused as you are overdrawn on 2 bank accounts; you have 2 store cards with as lenders would see it available credit; how do they know you're not going to spend everything available on these?
You also have a couple of defaults; so your payment history does not look good.
The best thing you can do is post an soa; Clapton has put in a link to this in his post above. We can advise you where to say money to pay off the overdrafts as quickly as possible.