Is this considered massive credit car debt?!

KayDude

Hey guys,

Up until a point last year I never had a credit card in my life and was very good with money, in fact if you check some of my earlier posts I was very naive about what 0% even meant. However as my expenses changed and income stayed the same I fell in the same trap as everyone else I presume and I let go pretty fast. In one year this is what I've acrued:

Halifax One Card - around £1400 with 0% for another 6 months.
Barclays Card - around £1700 with (0% on 1500 for 10 months, and 18% on the rest)

I do have at least another £700 that I expect to pay in holiday bookings over the next month on the Halifax card.

I have a decent income and I can pay back around £200 a month on average, but obviously thats not enough to finish the debt in 6 months.

I recently tried to get another card (Sainsburys) to transfer some balance there and give myself a small break but I got rejected. Im afraid that my credit might not be too good because this is the second card rejection that I got in 1 month!

So I guess the question is, is this considered unmanagable, should I consider bankrupcy? I dont know, Im really confused, any guidance will be appreciated!

Welshdebtor

To answer your question no I would not call it massive in the general term.But debt is debt, regardless of the amount involved.And I am sure there are many people on here who wish their debt was as low as yours, while I am sure their are people who have debts smaller than yours. May be totally wrong but I seem to have in my head that the average amount of debt in the UK is about £20-30,000, either way I am sure it's fair higher than your debt.

Remember the more cards you apply for the more it reduces your chances of being successful.

You can pay the £200 a month as you mentioned, and see how you cope. If not then look at reducing it to a more suitable figure. If needed in the future you can write asking for interest to be frozen once the 0% period is over etc.

BR should be a final solution.

opinions4u

The debt isn't the end of the world, yet.

But at some point you've spent over £3k more than you've earned. That's a cycle you need to break.

tom717

No you don't need to consider bankruptcy, you are just going to have to start paying interest on the money you have borrowed.

Firstly, don't spend £700 if you can't afford to.

Secondly, look around this site for ideas about where you can save more money, so that hopefully you can pay off more than £200 a month.

What are the rates that these cards will change to after 6 and 10 months?

Jox

If you apply for a credit card or loan and are rejected then you should wait about 6 months before applying again.
Keep paying £200 a month and after a few months apply for a 0% card again.

KayDude

tom717 wrote: »

Secondly, look around this site for ideas about where you can save more money, so that hopefully you can pay off more than £200 a month.

What are the rates that these cards will change to after 6 and 10 months?

At the moment I can probably even pay £300 and still be comfortable so if I can save on things I suppose it will go up to around £400. That's all easier said that done ofcourse.

The APR on the barclay card is 19.9% and for the Halifax card 21.9%.

_Persephone

Put all of your income and expenditure into the SOA calculator on https://www.makesenseofcards.com

Then use the snowball calculator. Going bankrupt because you don't want to have to start to pay interest is not a wise idea.

The interest is a will be a good lesson on the evils of credit cards I reckon. Just reign in the spending (do you need a £700 holiday) until the debt is paid back.

tom717

The first thing I would do is put £200 towards the Barclays card so that you are under the 0% limit (unless I have misunderstood you).

It sounds like you should be able to pay off the Halifax card before you have to start paying interest. Once you have done that, give them a ring and see if they will do a cheap balance transfer deal. If they won't, cancel the card and look for a new card offering 0% balance transfers. Don't apply for anything in the meantime.

KayDude

tom717 wrote: »

The first thing I would do is put £200 towards the Barclays card so that you are under the 0% limit (unless I have misunderstood you).

It sounds like you should be able to pay off the Halifax card before you have to start paying interest. Once you have done that, give them a ring and see if they will do a cheap balance transfer deal. If they won't, cancel the card and look for a new card offering 0% balance transfers. Don't apply for anything in the meantime.

No your right if I put the £200 towards Barclays then Im down to 0% for another 10 months. Ill then pay off the Halifax and try to get a balance transfer like you said, by then I might be able to get a credit card and transfer the Barclays balance if Halifax dont offer a balance transfer.

Thanks alot for all your help everybody, I feel more at ease now and have a much clearer image on the steps I need to take next. Much appreciated. :beer:

Welshdebtor

Toms advice is really good. Glad posting here has eased your mind.

Jox

Bless you, I never learnt about money management at school or from parents so it's been a hard slog, getting in debt and struggling to get out, I've been playing this merry go round game since I was 21 and am now 35 but with the help of Martin Lewis I will be money educated and debt free and so will you!
The banks, loan companies and credit card companies love ignorant people like me, I've been keeping them in houses, cars, holidays and nice dinners!