Clueless with creditcards! Please help!

secretsmile

Hi everyone,

first up , thanks for any help and advice you can provide!!

I am currently on maternity leave after having my 1st child in January but am now fast approaching the final 3 months where I will have no salary coming in (October, November and December), and to make matters worse its during the lead up to Christmas!

So I need money to pay my bills inc mortgage and credit card repayments etc, as well as everyday items such as petrol, food etc, yearly bills such as my car insurance and tax, but also all the Christmas presents!! To try and help my situation I have been saving like mad over the year and have just about managed to save enough money to cover my usual monthly bills (phew!), however that leaves me with nothing left for all those other things (see below).

Credit/financial key points:

1. I have an ‘excellent’ credit rating last time I checked and have had no problem in getting any kind of credit in the past.
2. I currently have a Santander 0% BT credit card with approx £5k of BTs on it (Limit is £6k, currently paying just minimum payments)
3. I have been a credit tart in the past and have moved my balance from card to card over the last 4 years, but have always cancelled the previous card once I have received that final zero balance statement (I have been reading on here that this was probably a wrong move?)
4. I also have a huge £1200 overdraft (not sure of rate) with one of my current accounts with approx £1000 of debt on it.
5. I have a ‘0% for 4 years’ DFS debt that I’m going to have to start paying off in October after the ’first year free’ deal ends, approx £1200. Will probably only be able to pay min payments.
6. Car insurance (£700) and tax etc is due for renewal in October (this is my first year of owning a car so I completely forgot about saving for this!)
7. I am going to go to part-time when I go back to work (down to three days) plus I am going to have to be now paying childcare costs at a whopping £130 per week! (so will be a struggle)

So, I am naturally worried about surviving the approaching final months of my mat leave along with Christmas, but also worried about my financial situation next year considering the increasing bills and reducing salary!! (I feel my only solution is to win the lottery at the moment!!)

I have a number of questions that I would like to put to you regarding credit card solutions to my situation which I hope some of you may be able to help with:

1. Firstly, have I been doing the wrong thing in closing my credit cards once the balance has been moved on? Will I have negatively affected my credit score?( – this is just to help me know what to do in future.)

2. The reason I closed those cards off was so that I could be a ‘new customer’ to those companies and take advantage of their new 0% deals in future. Does this actually work?

3. I now want to take out a ‘purchases’ credit card to pay for Christmas, can I apply to a company that I previously held a card with (the card I am referring to was closed in January) as I have seen cards offering the good 15 month 0% deal again? If not, how long do you have to wait before you are a ‘new customer’ again?

4. Would it possible to ‘pay off’ my £1200 overdraft using a new ‘balance transfer’ credit card? As this would then free up cash to cover the bills such as that DFS Direct debit that’s about to start as well as the car insurance and tax etc.

5. I know it is not ideal to take out more credit cards considering my reducing salary and increasing outgoings next year but I don’t see any other way around the situation? (other than selling my car and cancelling Christmas!)

6. Is there any other avenue I should be thinking about?

Thanks everyone for any tips or advice with regards to my problem or about credit cards!

SS
x

pugzy

Hello to begin with, seems like you were well aware of your situation months in advance and without that knowledge, you'd have been going under very quickly, so fairplay to you

I can help you on a couple of questions...

3: You need to read the T&C's of each card you're applying for with regards to being a "new" customer again. Some say 6 months, some say 18 so just check before you take the risk.

4: To pay off your overdraft with real money (as opposed to figures on a credit card/balance transfer) you'd need to apply for either the MBNA card or M&S are doing a similar thing where you apply for a "Money Transfer". This will then transfer real money into your account at a certain rate (my MBNA one is 0% APR till Oct 2012) and you pay it off at each month bit by bit like a credit/BT card.

Correct me if I'm wrong guys and girls but in the meantime, chin up and hope that helps!

guesswho2000

Good advice above, I'll try and answer a few more:

1) Maybe, maybe now, your score will depend on many factors, closing your accounts can affect it both ways, negatively - it increases your debt to total limit ratio (utilisation), positively it decreases your total available credit to salary. Utilisation you you aim to keep below 66%, total available credit you should aim to keep below 50% (rough guideline I've always had in my head).

2) Yes, absolutely, depending on their criteria for becoming a "new" customer, which can be as little as 30 days or up to 8 months etc, http://www.stoozing.com/cards.php gives a little more info.

3) As above and pugzy's response.

4) As pugzy's response, you need a "Super balance transfer" card, although from what you say you'd be clearing the OD only to use it again? It might be more useful to pay things like insurance by CC (even tax, the DVLA fee may be less than the 4% SBT fee charged by MBNA).

5) Correct, although if you do need the 0% cards etc that you may be eligible for now, you may not be once your salary does decrease, so may be better to do it now, as long as you don't end up increasing your overall debt.

6) You seem to be on the right track, only thing which stands out is £700 car insurance cost, have you shopped around? Although you did state you're a new driver, which probably explains that