One card at a time - with thanks to you all

wigwam

I have been lurking for a couple of weeks and this weekend particularly I have seen some fantastic success stories which have motivated me to sort out my own debts.

For my adult life I've always been in debt, and apart from the odd sleepless night / crisis moment this has been manageable. Well by manageable I mean I have generally been able to make all minimum payments, carry on enjoying life as I have an ok salary and therefore have not really given this much thought.

Most interesting LBM came last week when on a day off I decided to do some financial investigation and realised that despite paying £100 a month min payment to my MBNA card the balance has
gone down by less than £100 over the past 18 months!!! So I've given them £1700 interest..........
I called MBNA - and although I know the payment terms are about to change I have been paying £5 off the balance plus interest. Balance is currently around £4700 - not sure exact figure as I dont get paper statements and am locked out of online banking as forgotten password.

I now know this is by far my most expensive debt at 27.9%. Am I happy giving MBNA £100 of my hard earned cash every month? NO WAY!!!

So my new plan (your ideas from a weeks lurking, not mine!):
Throw everything at this debt
Min payment other cards as APR is less
Stop buying rubbish and treat everything I spend as MBNA payment rather than my money - as this debt will take a year to clear if I work hard I have to consider anything I buy now as cost price plus 27.9% as that will be the true cost of not paying the debt instead.
Do some extra work and pay off MBNA as soon as clears in my account.
I know if I try and deprive myself I will break so I will however allow myself £140 per week for travel, groceries and fun ( for me and my son)

I could talk forever but thats enough about me - but wanted to say a big thank you to all - these boards are truly inspiring :T:T:T

lvm

wigwam wrote: »

I have to consider anything I buy now as cost price plus 27.9% as that will be the true cost of not paying the debt instead.

That has got to be the best way I've ever heard debt repayments being described!

If that doesn't make people pay off their credit cards, I don't kow what will!

I'm certainly going to keep that one in mind for the future!

Good luck on getting rid of the card!

May2013

Well done Wigwam...isn't it just the best feeling when you see your debt for what it is and more importantly what it's costing you!!
Being in control has been the most liberating feeling in the world for me.

wigwam wrote: »

I have to consider anything I buy now as cost price plus 27.9% as that will be the true cost of not paying the debt instead.

Great tip to factor in the interest rate on any new purchases...very focussing when considering the 'do i really need this?' question.

Good luck...look forward to hearing about your progress

DebtFreedom_2

I do something a bit different and add on the tax and NI I paid to say "this $100 purchase means I have to earn an extra $150... add on the interest etc an every purchase looks expensive. The true cost of things really is frightening!

gettingbackontrack

lvm wrote: »

That has got to be the best way I've ever heard debt repayments being described!

If that doesn't make people pay off their credit cards, I don't kow what will!

Yes, what a great way to think of it. I wish I was brave enough to add up all the interest I've paid MBNA and Barclaycrad plus my store cards over the past 15 years or so.... but then again, I don't think I want to know.

Good luck tackling your debts, wig wam.:)

cloudcuckooland_3

:jWell done wigwam I can so empathise with this - throwing all your money at the highest rate interest debtor is called snowballing and can be found at whatsthecost.com where a money saving expert has kindly given us all a calculator to work out who we need to pay first according to interest rates charged - however looks like you don't need this as thanks to Light Bulb Moment you have worked out the best plan for you!!

Recently I have noticed my Asda credit card payments going backwards:eek: I have defaulted on some but my catch up payments have been negated by default fees! I am now throwing all
my spare money at this account, especially as it has an exorbitant rate of interest.
I am about to get a tax rebate and this is exactly where it will be going!!
Keep up the good work:T
Ps if you feel yourself getting a bit demotivated, you know where to come for more support!

Fedupofbeingindebt

Great plan!!! This has really inspired me as I've been in the same position as you with my Barclaycard for the last couple of years. It's so annoying giving them your money every month and hardly paying anything off as the interest is high.

Good luck!

wigwam

Thank you all for your support - and even more ideas!

Didn't want to say more than necessary in order not to bore people but its nice being around likeminded people.

When I get paper statements through I'll post the figures in my signature so I can see the ££'s being ticked off month by month

Payday tomorrow though and have already set up an extra payment to go out for £250 - what I don't have I wont miss

Have extra work booked for this month and a cheque in my bag for £130 but couldn't find a bank open yesterday morning

And just off to read through the many challenges and see what suits best... lunches...PAD.... sealed pot.... oh where to start!
Thanks all :T

wigwam

Fedupofbeingindebt wrote: »

Great plan!!! This has really inspired me as I've been in the same position as you with my Barclaycard for the last couple of years. It's so annoying giving them your money every month and hardly paying anything off as the interest is high.

Good luck!

Do it!!! The sooner we give them their money - the more we will have for ourselves...... you know it makes sense;)