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Help please - credit card advice

edited 30 November -1 at 1:00AM in Debt-Free Wannabe
8 replies 972 views
EbzEbz Forumite
13 posts
edited 30 November -1 at 1:00AM in Debt-Free Wannabe
Hi All,

This is my first post, although I've been lurking for a while. I'm trying to get to grips with my debt and in the process of trying to cut down my bills and work out a proper budget etc. I haven't got my soa sorted at the minute, but was hoping I might be able to get a bit of advice about my credit cards.

I've got a Virgin credit card, which has the biggest balance of three cards. I was already hoping to be able to transfer to a life of the balance transfer or a 0% card, but with the new minimum payment calculation coming in on this card I think I'm really going to struggle to cover it, so it's become more urgent.

My problem is, I applied for an MBNA card with a low rate life of the balance transfer, but it was only after I was rejected that I realised this is who my Virgin card is with.

Does anyone know how this will affect my credit rating if I apply for another card as I have a rejection - will the other companies be able to see that it was actually the same card company I was already with?

I think this was why I was rejected, but there are some other things that might be affecting it. I have paid a couple of late payments over the time I've had my card - just messed up on the transfer time for online payments - so only a day or two late. Would this have a big impact on my score?

The other thing is that my husband is doing a dmp (for about a year now), does this mean that no one will consider giving me a balance transfer? We have a joint account - but only I use it to pay bills and a secured loan which is in both our names, but he pays as it was his debt.

Any help or advice would be appreciated. Just want to try and get the best deal I can in order to pay off as much as I can of the actual debt rather than the interest!

Thanks!

Replies

  • mdr86mdr86 Forumite
    101 posts
    Part of the Furniture 10 Posts Combo Breaker
    Have you read through http://www.moneysavingexpert.com/loans/credit-rating-credit-score?
    I don't think I know anything that's not on there, if you've read that or it doesn't help, I expect someone else will post soon who knows a bit more about this than me :)
  • EbzEbz Forumite
    13 posts
    Thank you for the reply and the link. I have had a look at this before and from what I can tell I am still have a 'good' credit score. I've also done one of the credit card comparison things which Martin suggests which does a soft search on your credit file and that came back as 'good' too.

    I guess the big thing is how much my husbands DMP would affect me given that we are linked financially?

    Also, a question about interest. If I start paying the 1% of my balance plus the interest, does that mean the next month the payments will be slightly reduced as there will be a smaller balance to charge interest on and so forth? So that the first payment will be the highest, but it wont get higher than that? It's just at the minute I have a varying minimum payment, and I'm a bit confused about how the interest works?

    I would hope to pay off as much as I can, but just thinking of those months where unexpected things crop up and you need to cut back etc.

    Many thanks.
  • TixyTixy Forumite
    31.5K posts
    ✭✭✭✭✭
    Hi

    Any other potential lender looking at your file will not see the name of the company that searched you. They also don't see the names of the banks that you currently have debts with. It all appears anonymous in terms of bank names.

    Having a joint secured loan will mean that you are financially associated. Therefore your husband being in a DMP will have a big impact on your ability to get credit.

    Regarding the interest.
    Is this a card that you are no longer spending on?
    On MBNAs new minimum payment plan the overall minimum payment will gradually decrease over time. But its worth being aware next month might not be the highest it ever goes and statements can be drawn up on slightly different dates, so its possible 1 statement will have say 29 days interest on it and the next could have say 33days interest on it.

    And of course the other thing to be aware of is that if they increase your interest rate at any point (they have to notify you first) then that would mean the minimum payment would increase.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • EbzEbz Forumite
    13 posts
    Thank you for your help, I didn't realise that the names didn't show up.

    The card is now closed as I haven't spent on it in quite a long time and I rejected the increase in the interest rates when they tried to raise them a while ago, thankfully! Thanks for the information about the interest calculations, it makes sense now. I guess hopefully it wont get too much higher than the initial payment. Will try and find some stuff to sell to clear a bit of the capital off and that might help to soften the impact.

    I think my best bet will just be to manage paying the higher payments as at least this means I will be reducing it. I think I should be able to meet it. I'd rather not get into a DMP myself as I'm in the position where in the next year or so I could be earning significantly more and able to pay of some fair chunks off my debt (this is why I've been just ticking along rather than really trying to pay loads off - very naive in terms of interest etc I realise now), and at least maintain control (sort of) of how I choose to spend my money. I guess though if my credit is already going to be affected then it might be a solution if it gets to the point where I just can't meet the payments. Unfortunately the secured 'consolidation' loan was taken out by my husband when we were both more naive about the best way to deal with things. And then unfortunately he was forced into a dmp after a series of redundancies in a short space of time and we just didn't have any savings to fall back on.

    Really determined to get on top of everything now though and try and move forward out of this situation. This site is really invaluable in helping to get things turned around, I just hope I'm able to make enough of a difference. I was managing ok (except not really making any dents into repaying the money), but due to being out of work for a month at the end of last year, and the only money being available was a card, I've got into more of a pickle :(
  • TixyTixy Forumite
    31.5K posts
    ✭✭✭✭✭
    Hi

    I guess as husband is in a DMP you have probably already been through all your other outgoings to check you are on the best deals etc? If not or if its been a while then it might well be worth checking them all again (things like phone, internet gas & elec suppliers etc are worth checking at least once a year).

    If you cannot find any areas to reduce outgoings it might be worth posting up a statement of affairs to see if anyone on here can help you spot any or make any other suggestions. I know this issue with MBNA is causing quite a lot of people problems and making them consider a DMP etc but hopefully you can find a way to make the minimum for now until your finances improve.

    As an aside - is husband's DMP a free one (with a charity or Payplan)? or one he is paying a monthly fee for?
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • EbzEbz Forumite
    13 posts
    Thank you. I've been going through all the bills etc trying to make sure we're on the best deals. We seem to already be on competitive on most things, but I have saved a chunk off the electric/gas bill by switching to an online account.

    I'll definitely post an soa once I've got it sorted. I've had to wait until this payday to see exactly what money I'm coming out with now so I can work out a budget as this was my first proper pay since August(!)

    Unfortunately hubbies dmp is through a company, which again, having come on here I know realise was not a good idea :s He says though that he doesn't pay a fee monthly, but that the first two payments were for their fees, I'm unsure though? I have convinced him to speak to the CCCS though to see if he would be better switching. He still has an overdraft on his current account that wasn't included and I think it would be better to change the dmp to the cccs and include this so that all the debts are being tackled. Fortunately all, but one I think, of the creditors have frozen the interest.

    Thanks for the advice :)
  • EbzEbz Forumite
    13 posts
    Hi,

    Thank you. I have been checking through all the bills. We seem to have fairly competitive prices, but I have saved a chunk off the gas and electric by switching to an online tarrif.

    I'll definitetly post up an soa once I've worked it all out. This month was the first proper pay I've had since August so needed to wait and see what I'd be coming out with after tax etc.

    Unfortunately hubbies dmp is through a company, which I now realise isn't a good idea :s I've eventually persuaded him to speak to the cccs to see what they say. He has an overdraft which isn't in the dmp at the minute and I think he should look to change accounts and then put this in as well, so that at least all of the debts will be getting paid off. Hopefully the cccs will be able to advise if this is possible and the impact it would have. Fortunately all the creditors (except perhaps 1) have now frozen the interest so at least the balances can start to decrease now.

    Thanks for your advice :)
  • TixyTixy Forumite
    31.5K posts
    ✭✭✭✭✭
    I don't know of any companies who don't continue to charge and take a % of the monthly fee - he could be right though. Glad he is going to talk to CCCS though and I agree you really need to get the overdraft in the DMP as well. If his bank suddenly withdraw the overdraft (after seeing defaults etc from other creditors etc) he could end up stuck.

    Good luck with the budgeting etc.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
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