Need small debt advice

JustMadMike

Hi Everyone

After buying a house and going on hoilidays I've dropped myself into some relatively small debt. I have an overdraft of £2000 which I max out every month, I also owe a family member £2000 which i'm paying back £100 a month.

I would like to get out of my overdraft and have some money for a small holiday. I pay £30 in overdraft fees a month and £8 a month for a silver account at Lloyds TSB but didnt cacel that because they said my ovrdraft intrest would rise. My thinking is that it would be beter if that £38 went towards paying back a credit card or loan that I use to pay off the overdraft?

I've never had a credit card before (apart from one I never activated) I thought I could get a Barclays 0% balance transfers for 24 months and pay off my overdraft. But after talking to someone on Barclays Live chat I was told I couldn't use that to pay off my overdraft.

Any Idea's or advice would be greatly appriciated!

I'm 21, earning £23k, around £1500 a month. Credit Expert says by credit rating is good, score 881.

BeautyandtheBeast_3

i asked my bank to reduce my OD limit by 10 per month and it has helped a lot. I am with HSBC.

Tixy

Only a few credit cards allow you to pay off an overdraft by balance transfer. And the 0% cards that do this tend to be that easy to get, you might struggle if you haven't had a credit card before and if you use your overdraft every month (most potential lenders view this as not being in control of your spending).

However in your case I would be tempted to just look at your spending and cut back to the minimum for a few months. If you have £1500 in and £600 out then even with some expenses and a bit on going out you should hopefully be able to clear £500 a month off your debt and you'll be debt free in next to no time.

mrsb83_2

I would make some cuts and apply the savings to your debts. £30 in interest a month will soon start to reduce as you go less and less into your overdraft.

JustMadMike

Thanks for the advice, I've been trying to cut down on spending and it seems like I don't actually buy anything but end up with no money at the end of the month anyway. I might keep a spending diary for a bit so I can see where it's all going. I've had to quit smoking because I worked out I was spending £100 a month on my habbit. I do really want to go on a cheap holiday but It doesn't look like I'm going to be abl eto arrod it!

Many Thanks!

JustMadMike

Downloading some bugdeting apps for my phone, hopefully these will help!

What credit cards are available that will pay off my overdraft?

Tixy

These http://www.stoozing.com/sbt.php

But even if you get one make sure you do take control of your spending and budgeting

GAH

Have you done a Statement of Affairs before? The link is below.

http://www.makesenseofcards.com/soacalc.html

Its a good start to get everything down in writing to see where you can cut back potentially.

If you post it on here, people will certainly give you some handy tips, or course you don't have to, but its well worth doing even just for yourself.

And, keeping that spending diary is also a great idea.

foxgloves

If you get your monthly payments/outgoings down to the minimum....it's always surprising what can be cut when you get some fresh eyes on the matter ......then I agree that the best way is to throw any extra money into the debts to get rid of them. As someone who has only just cleared debts after 20 years of spending more than we earned & never budgeting, I'd also say, with my new sensible head on, that the holiday, even a little one, is something for you to do after the debts have been paid. That way, the holiday can be paid for guilt-free from your own money. If your holiday has to go on your overdraft, you're just delaying your debt-free day because you are spending someone else's money. Think of it as a reward for when you are again living within your means and ALL your earnings are your own, rather than paying off stuff you've already had in the past, along with all the interest this entails. Also, I know the standard advice is to pay off youor debt that has the highest interest first, but we opted to pay off our overdrafts first & once we'd done that, I (as chief budgeter in the relationship!) found it just sooooooo much easier to budget because I could see much more easily what I'd got each month and didn't feel so much like our money was just falling down a black hole before all the bills, etc, started going out. Be really tough on yourself for a year or so now, and this will hopefully get you on track and stop that debt growing in the future.