Badly in debt with credit cards.

Rich22

Hi, I'm a newbie

Don't know if this is where I should post this.

After many years together my girlfriend and I are separating. She always looked after the finances and always did her best with them. But now I have taken control of them and realize how badly in debt that I am. I have made several savings since taking control of my finances such as:

Reducing Sky Tv to £12.50 from £35.50 saving £22
Canceling Amicus Union saving £ 10.96
Canceling Which magazine subscription £ 10.00
And stopping Payment Protection Insurance £ 133

Giving me a total saving of £ 176 a month.

My biggest problem is with credit cards, one being OPUS formally known as CITI. My current balance stands at £ 10,727, with interest charged at 41.1% apr which comes in £ 315.79 ! I must say that after speaking to them with regard my situation they were very helpful. They have put me on a 'Fair Treatment Plan' which reduces my monthly payment to £ 175 a month and the interest rate is reduced to 0.000% for 6 months which they will review in December. Needless to say I don't use my credit cards now.

My other credit cards are as follows:

MBNA £ 1,085 minimum payment of £ 50
Tescos £ 4,343 with a payment of £ 135
Capital One £ 1,000 with minimum of £ 40
Barclays £ 605 minimum payment of £ 15
Abbey £ 1,337 minimum payment of £ 60
Debenhams £ 1,113 minimum payment of £ 50

Therefore my total minimum payments for credit cards are £ 525 which includes the reduced payment for OPUS.

My other monthly household outgoings are:


Sky tv, phone and internet £ 36.50
Mortgage & life insurance £ 44.37
Car Finance £ 280.00
Water £ 19.92
Car Insurance £ 65.17
Tv Licence £ 10.87
Mortgage £ 1,000
Coucil Tax £ 135.00
House Insurance £ 50.24
3G mobile £ 10.00
British Gas £ 40.00
EDF £ 40.00

Giving a total of £ 1732.07

I have allowed £ 200 for food, £ 200 for spending such as dentist, optical, hair cut etc, and £ 100 for petrol. A total of £ 500.

Therefore my total outgoings a month come in at £ 2,757.07. On average my monthly income is £ 2,600. I am predicting it to be this month with some overtime to be £ 2,800. Just about enough to cover this months outgoings but things will still be tight.

Has anybody got any other ideas of how I could make some savings. It's the credit cards that are a problem for me and once I can get these down things should be alot easier. I can't do balance transfers or get loans to consolidate as I have a really bad credit rating.

Thank for any advice.....I know I've only got myself to blame for the mess that I am in.

sarah1111

Gosh, there is a lot for you to sift through and you are early on....don't panic there is a way out!!!! Firstly you need to go through you incomings and outgoings properly, you can easily find links to do this through many websites. Secondly try to speak to a debt management charity. They wont charge for their advice and are often taken more seriously when submitting DMPs as you creditor will know you have gone about things properly and honestly. Another point is that there is different legislation for different areas of the UK, so advice/tips I might give living in Scotland may be slightly diff from those living in England/Wales.

Don't worry though, as so many have said to me the hardest part is over.;)

katsu

on the sticky threads you will find a link to a site called makesenseofcards. We ask you to use their SOA template (hit format for MSE and post the output here). We can then advise you.

For now my advice is
* cut the sky tv totally
* reduce the £200 food as for one person you can def. make savings (look at the old style forum here)
* reduce the £200 other spends - use the SOA template to get this more accurately broken down.
* your gas and elec are hideous at £40 each - use comparison sites to see if you should switch

HTH

smartiedriver_2

Rich22 wrote: »

I have allowed £ 200 for food, £ 200 for spending such as dentist, optical, hair cut etc, and £ 100 for petrol. A total of £ 500.

Wow... £200 for dentist, optician and hair..... EVERY MONTH? This is where you make your savings! I pay £8 each month for contact lenses, no dental unless I need treatment (and then use NHS) and I have my hair cut for £26 a time twice a year.

No wonder you are in debt if you're spending £200/month on those things!

MFWannabe

Hi
First of all; welcome to the board. You will get some really useful and helpful advice here.
first thing i would suggest is that you fill in a proper soa using the one on www.makesenseofcards.com this gives you chance to enter amounts for absolutely everything and will give people on here a much clearer picture of all your incomings and outgoings.
Do you have a spare room that you could rent out? Even if it was for a short period of time until you'd paid your debts. You are allowed to earn 4k per year before having to pay any tax.

huxley309

With regards to sky tv, do you really need it. You can run sky bb on it's own and be charged £2.50 extra less what you pay for tv if you cancel it.

So my max package is £17.50pm

Honestly cancelling sky tv was the best thing i've done, i never used it anyway.

House insurance is looking high, what about going onto a price comparison site to get that knocked down a bit.

And as above to what everyone else suggested.

vax2002

£2.50
one pair of scissors and cut all the credit cards up.
that is the first step.
The rest will follow on.

hostie

Are you up to your limit on the cerdit cards that you have? If not, look at the letters from them or phone them and ask if they have any balance transfer offers. Then move some debt from high interest cards to the special offers from the other cards.

Also, work out what the apr is for each one so you can make a strategy of which to pay first.

elsiepac

Rich22 wrote: »

Hi, I'm a newbie

Don't know if this is where I should post this.

After many years together my girlfriend and I are separating. She always looked after the finances and always did her best with them. But now I have taken control of them and realize how badly in debt that I am. I have made several savings since taking control of my finances such as:

Reducing Sky Tv to £12.50 from £35.50 saving £22
Canceling Amicus Union saving £ 10.96
Canceling Which magazine subscription £ 10.00
And stopping Payment Protection Insurance £ 133

Giving me a total saving of £ 176 a month. Fantastic start, well done!

My biggest problem is with credit cards, one being OPUS formally known as CITI. My current balance stands at £ 10,727, with interest charged at 41.1% this is completely shocking on such a large balance as well...grr! apr which comes in £ 315.79 ! I must say that after speaking to them with regard my situation they were very helpful. They have put me on a 'Fair Treatment Plan' which reduces my monthly payment to £ 175 a month and the interest rate is reduced to 0.000% for 6 months which they will review in December. This is good of them and another excellent step forward. Needless to say I don't use my credit cards now.

My other credit cards are as follows:

MBNA £ 1,085 minimum payment of £ 50
Tescos £ 4,343 with a payment of £ 135
Capital One £ 1,000 with minimum of £ 40
Barclays £ 605 minimum payment of £ 15
Abbey £ 1,337 minimum payment of £ 60
Debenhams £ 1,113 minimum payment of £ 50

When you do your SOA the CC debts above will become a bit clearer as you haven't mentioned interest rates on these - as I've said below, the snowball calculator may then help you see which are actually costing you the most.

Therefore my total minimum payments for credit cards are £ 525 which includes the reduced payment for OPUS.

My other monthly household outgoings are:


Sky tv, phone and internet £ 36.50 but you've said above you amended this to £12.50 from £35.50???
Mortgage & life insurance £ 44.37 Do you have dependants? If not can you cancel or at least shop around to look to reduce this amount, then buy new through a cashback site?
Car Finance £ 280.00 Eek! the SOA will give an idea of how much your car is worth, and it may be worth considering whether selling it on and buying a cheapish runaround for the time being will make you better off (depending on your type of finance agreement this may not be an option of course)
Water £ 19.92
Car Insurance £ 65.17 Seems very high to me, is there a reason for this? I thought mine was high at just under £41 a month with Tesco, especially with 5 years no claims, however I have my no claims protected, breakdown cover, courtesy car, legal cover of course, and I'm fully comp. Any option to switch or reduce if it is added extras that are pushing it up?
Tv Licence £ 10.87
Mortgage £ 1,000 Wow! This may be a sore point but are you looking to downsize at all now that it is just you there? Or as someone else said, consider getting a lodger? If unhappy with full time, you could always advertise for a Mon-Fri professional, and of course you get to interview them, you don't have to end up with someone you won't get along with!
Coucil Tax £ 135.00 If you are now on your own which I'm assuming you are, you can get the single occupier discount which will knock 25% off this. Not to be sniffed at! Don't forget to notify them if you do get a lodger though!
House Insurance £ 50.24 Quite high, can you shop around at all - don't forget to use cashback sites!
3G mobile £ 10.00
British Gas £ 40.00
EDF £ 40.00 these are both high, remember to turn EVERYTHING off completely, not on standby when you are done using things. Line dry instead of tumble (if applicable) wherever possible, change to energy saving lightbulbs etc

Giving a total of £ 1732.07

I have allowed £ 200 for food, this is very high just for you but it can be hard to cut back straight away if you are used to a certain standard. I would suggest keeping a diary of literally everything you spend on food for the next month that this budget covers, you'll soon see where you can cut back (hopefully)

£ 200 for spending such as dentist, optical, hair cut etc, As others have said this seems well out of proportion. On average you have a checkup at the dentist every 6 months, and on NHS this is about £17 a time assuming you don't need anything bigger done. so assuming you have no major ongoing problems you only need to allow £3 a month ish for this, maybe round up to £5 or £10 if it makes you feel better. Optical - depends what you need. e.g. contacts, if you know your prescription there are some very good suppliers on the internet that you can use and make big savings. Obviously research them first! Again, hair cuts - even if you have one a month, (which is more than anyone I know!) how much can this really cost? Can you cut back and go every other time? Or compromise? e.g. I have a cut and colour one time, then the next time I only have a cut. Saved loads by doing this! To be fair I'm assuming this budget actually covers ALL your incidental spends and perhaps you didn't choose the best examples to illustrate this - so I'm thinking perhaps this covers your Presents fund, your Entertainment fund, your Car Tax fund, your Car Emergencies fund (these last two you REALLY should put money aside each month for so you're covered and don't have a large payout one month which would ruin your careful budgeting!) etc.
and £ 100 for petrol. A total of £ 500.

Therefore my total outgoings a month come in at £ 2,757.07. On average my monthly income is £ 2,600. I am predicting it to be this month with some overtime to be £ 2,800. Just about enough to cover this months outgoings but things will still be tight.

Has anybody got any other ideas of how I could make some savings. It's the credit cards that are a problem for me and once I can get these down things should be alot easier. I can't do balance transfers or get loans to consolidate as I have a really bad credit rating.

Thank for any advice.....I know I've only got myself to blame for the mess that I am in.

Hi Rich, and welcome to the board

I'm sorry to hear that you and your girlfriend are separating, it's a hard enough thing to have to deal with on top of then trying to sort out all these finances.

As others have said, you need to do your SOA fully, FREEZ posted the link for you. In your case, the most important thing this will achieve is to lay everything out very clearly as you have a lot going on there, and more importantly to those trying to identify savings for you, it will show us all just where your £200 goes.

I disagree about cancelling Sky completely, if you use it, it can be a great reason to stay in and perhaps remove temptation from going out and spending money elsewhere. I assume your new monthly payment of £12.50 still includes your broadband and phone calls? If not, it should. You can get your basic package with these included for a similar amount by threatening to leave. Aside from that, it's such a minimal saving compared to some of your other areas that right now I think you can leave it and maybe revisit later.

i've put a couple of comments above, based on my experiences but please note I'm not an expert and others may have much better advice!!! However, really the next thing for you to do is your SOA, this will identify your priority debts (i.e. which are costing you the most) and you may be able to sort using the Snowball Calculator. It's a start.

Best of luck to you

LC x

Tebheag

Hi
Sorry to hear about the split, Have noticed that your mortagage is £1000 a month does this mean you have a spare room that you could rent out would be a great way to raise extra cash to pay of the cards. Would recommend keeping a diary to see exactly where the money goes as £200 a onth for dentist etc seems a bit high.
Good Luck

CH27

Have you claimed your 25% Single person discount on your Council Tax?

£200 per month for dentist etc is very high.