interest killing me

pk1971

hi
i have got into a terrible mess with a couple of credit cards, iam keeping up with payments but i owe £7874, min payment £119.61 and interest is £114.52 so iam only paying £5 off the debt so will take not only years and years to pay off but the interest payments are so high.
i have tried to do a balance transfer but cant get any more credit cards so i really feel lost in all this.

any help or suggestions would be loved by both myself and my family.

thanks
paul

[Deleted User]

pk1971 wrote: »

hi
i have got into a terrible mess with a couple of credit cards, iam keeping up with payments but i owe £7874, min payment £119.61 and interest is £114.52 so iam only paying £5 off the debt so will take not only years and years to pay off but the interest payments are so high.
i have tried to do a balance transfer but cant get any more credit cards so i really feel lost in all this.

any help or suggestions would be loved by both myself and my family.

thanks
paul

Hi Paul
Didn't want to read and run - You may get a better response if you do a SOA and post it here as well, people will be able to help you cut back on things and give a better idea of ways to help

You will find the SOA calculator HERE

P
X

walby1993

Hi Paul,

Wow, that would take a long time so I can understand your despair. However, I notice you said minimum payment. Is there any chance you could afford to pay more? I did some quick calculations and just by paying an extra £5.39 a month, i.e. rounding payments to £125 per month, will reduce the length of time it takes you to pay it off by 4years! Rounding payments up to £130 a month will knock a further 2years off!

Also, I have heard you can have interest reduced if your struggling to afford repayments (some kind of Government initiative) but not sure how this works. Maybe someone else on here would be able to give you more info on this.

HTH

debtfree2010

Hi Paul,
I too am struggleing to meet the minimum payments, i do round them up ie £97 i pay £100, but the majority being interest the debt is hardley touched :mad:

I am going to write letters to my creditors and see if they will close the accounts and reduce the % as most of my cards are on 18% or 25% APR and its killing me:o

If they dont agree to reduce the % I have no option but to go on a DMP, I know this is the only way forward for me. But my hubby is still got his head in the sand and not ready for a DMP just yet :mad:

Take care

Jinx

You could ask the credit card companies to freeze the interest to give you some breathing space as you are uptodate with your payments. A couple of threads seem to suggest the companies are doing this. This would be my first option as you are managing to pay which is a great start and you could keep your credit rating/file intact .

Obviously if you decide on a DMP you could just ask them to freeze the interest with no end date, however, it does trash your credit rating and get you defaults as mine did... ho hum...

pk1971

thanks for all your help.....going to up the min payment to what i can and also call them to see what they can do for me!!!! :beer:

Tixy

Hi

Usually your creditors won't agree to freeze interest unless you enter a debt repayment agreement with them or a debt management program with a charity or third party. Either of which would affect your credit score.

Have any of your cards recently put up the interest rate or threatend to? are you aware that you can reject any such rate-jacking.

Do the APRs differ a lot and if so are you up to the limits? if not you may be able to slow-stooze some of the debt from the more expensive card to the cheaper one. Slow stoozing is where you put some of your normal monthly spend on the cheaper card (instead of using cash/debit card) and then use the spare cash in your current account to repay more off the most expensive debt).

Have a look at the snowball calculator to see how much difference just paying those few extra quid a month will make to how long it will take and how much interest you will pay overall - see here http://www.whatsthecost.co.uk/snowball.aspx

Good luck

pk1971

just spoke to bank of scotland ref this card and they told me nothing they can do with the interest rate and that they cant freeze the rate unless i fall very behind with payments :mad:
they did offer me a loan though :eek:
guess i will just be best to increase my monthly payments to the max i can afford

pk1971

Tixy wrote: »

Hi

Usually your creditors won't agree to freeze interest unless you enter a debt repayment agreement with them or a debt management program with a charity or third party. Either of which would affect your credit score.

Have any of your cards recently put up the interest rate or threatend to? are you aware that you can reject any such rate-jacking.

Do the APRs differ a lot and if so are you up to the limits? if not you may be able to slow-stooze some of the debt from the more expensive card to the cheaper one. Slow stoozing is where you put some of your normal monthly spend on the cheaper card (instead of using cash/debit card) and then use the spare cash in your current account to repay more off the most expensive debt).

Have a look at the snowball calculator to see how much difference just paying those few extra quid a month will make to how long it will take and how much interest you will pay overall - see here

Good luck

Thanks for that info.....
if i continue to pay the min it says it will take until sept 2072 to pay off and will pay £101,105,895.00 in interest :eek:

i am going to change to £250 per month and if iam correct this now shows i will be clear in 2014 :T just have to make sure i make the payments now

thanks again

RAS

pk

Please can you list your debts with APRs, maximum values, amounts owing on cards and end dates for any loans.

if you can use your cards still, or can later, you may be able to juggle your money to reduce your minimum payments.

eg

1000 owing, 1500 max on 29% APR
1000 owing, 1500 max on 16.9 APR

rearrange that to pay

500 owing, 1500 max on 29% APR
1500 owing 1500 max on 16.9% APR and you save a lot of money.

Put it is in the snowball on www.whatsthecost.com.