Need Some Advice Please !

iffyh786

At the current moment my parents have lots of debt on credit cards & I am helping them pay it off.
I have managed to reduce the debt by about 5 - 6K in the last 3 months and would like some advice on the best way of shifting debt between their existing cards. Please find below the details of the credit card debt:

Credit Card -Outstanding- Rate %- Credit Limit- Lob Offers
Natwest Master -8821.49- 18.9- 9200- 7.9 2% fee
Natwest Visa -9769.53- 20.9- 10000- 7.9 2% fee
Sainsbury -8179.9- 24.9- 8500- 24.9%
CSMA -8096.53- 14.9- 8500- 3.9 for 6 months
Frizzles -9238.02- 12.9- 9600- 3.9 for 6 months
Abbey -8058.53- 21.9- 8300- 21.9
Abbey -8846.23- 21.9- 9900- 21.9
Lloyds Visa -9804.38- 20.35- 10000- 7.9 2.5% fee
Barclays -9425.16- 22.9 / 27.9- 9700- no offer
Amex -7383.47- 14.9- - card has been stopped by amex-

Lloyds Mastercard -2275.06- -7.9 LOB
LFC MBNA -4233- -0 for 9 months

CITI -0- -27.9 for BT's

The MBNA is my card, which I used to BT from the CITI Card.
Please be aware that getting new credit is a no go for my parents.

I have around 1K that I want to use to pay of some of the debt off.

Your advice will be very appreciated.

Regards

leon103

Could you apply for 0% interest cards? Capital one do one for 15months interest free, or M&S does a LoB at 3.9% and transfer some of the debt onto those. At least you will be saving all that interest

andyboyo

If you have 1k to pay off then pay it off the card with the highest APR.

That seems a large amount of unsecured debt to hold on cards.

There is a snowball calculator somewhere which no doubt someone will post a link for.

ex-egghead

First thing I would say is, see if they can increase the Mortgage or get one. It'll be much cheaper to release some capital from the property to pay off some if not all of the debt. If it's in the mortgage for a start its a lower apr, you will have morgage protection just incase as well.

If thats not possible, I personally would look at Loans and shifting some onto there. You will get a much better APR and more of a structured repayment system. Try either the Mint loan or the Egg loan. Last time I looked they were particually good APR's, bearing in mind that each loan you take out is a max of £25k (because its unsecured).

Hope this helps.

ex-egghead

Just realised you said about getting more credit for them is a no-go.

Approach some of the banks and ask about a consolidation loan. Tell them to stress to the banks that they do not wish to have the credit card any more and that you wish to consolidate the debt. I would recommending seeing a financial advisor to suggest the best place to move the debt to.

neil40

Wow, that it a lot of debt.I would advise going to a free debt advice place(citizens advice?).It seems a lot of money to tackle yourselves.Good luck!

iffyh786

As I have just recently got the MBNA card, I was going to wait a few months till I apply for another one.

All I need to do is get the monthly payments down by about £500. :eek:

andyboyo

OK, if I've done my sums correctly:

The outstanding debt is approx £90k. So if all minimum payments are say 2% then you have £1800 going out every month to service the minimum payments.

To get your minimum payments to £1300 (reduce them by £500 per month) you need to reduce the debt to £65k.

So you need to find £25k immediately to reduce your payments by £500 per month.

iffyh786

Wow! Didn't think it would be that much.
I don't have that much at the moment, but its nice to know how much I would need to reduce just by £500.

The main reason I wanted to do the shuffle was so that I could reduce the interest we are paying on some of the cards. so inturn having a better chance of reducing the debt quicker every month.

I thought I could start with balance transfering to the CITI card and then working my way through the other cards until most of them are on low Life of Balance interest rates. Don't know if this is a good idea or not.

Cerenia

I'd say definatly try the morgage or loan thing first, then once/while thats being looked at, have a massieve clearance, if its not wanted, sell, clothes, old toys, ornaments, anything. Little amounts will all build up- from literally junk from my early teens I made £230 in a day, just stuff like books, jewellry, little goodie bags (things like a piece of jewellry, small toy some samples etc etc) for 50p/£1, also bying big bags of things to make into smaller (I made ladies gift baskets with smellies in for about £2 each, sold for £5 each). Also did a tombola for girls/boys which was highly popular.

Its not much, but if you can stick to it, it can help raise that bit extra to help, if you can get to a sale, carboot or fete and take a carload, hopefully bring in a few hundred towards your debt, can help if you were doing nothing that day usually!

Although it will be a struggle with so much debt, it can be done, good luck!

iffyh786

Thanks for that.

The only problem I have is that the interest that we are paying is horrendous. Just need to reduce that on some cards so that we can pay off more of the balance and not just the interest.

Making the minimum payments is not the problem, its the interest.
Thats why I want to do the credit card shuffle and was wondering the best order of doing this with the cards we have at our disposal.