Credit card worries

jlo

Hi,

I'm trying to get myself out of debt and my egg card debt is really depressing me.

Basically, since July 2006 I've been hard at work paying back my £2000 overdraft - it's now clear and I am determined not to go into the red again. I have a full time job and a part time job. I owe Capital One approx £1500 (paying the minimum every month), approx £500 to RBS Visa (pay the minimum plus extra, hope to clear at the end of this month/middle of next) and egg as follows:

Transaction details date description amount

OPENING BALANCE £1,423.23 DR
29 Dec 2006 PAYMENT 2 EGG . GB £28.46 CR
15 Jan 2007 MERCHANDISE INTEREST AT 1.385 PER MONTH £1.19 DR
15 Jan 2007 CASH INTEREST AT 1.736 PER MONTH £23.39 DR

closing balance: £1,419.35 DR
minimum payment: £28.39

Thing is, I can't understand what interest rates I'm paying, or anything. I feel really stupid and scared as my Egg balance is staying roughly the same every month. This month I've started making additional payments - they'll show up in the next couple of days.

I don't know if I should do a balance transfer or what - I recently applied for a 0% card and was turned down (I checked my credit report and it's completely fine, but I probably have too much credit available - Capital One has a £2500 limit, RBS a £700 limit and I have a Barclaycard with a £600 limit and a zero balance).

Clearing my overdraft is admittedly a psychological thing, as I've lived in the far reaches of it for six years (it's with RBS). I want to clear my RBS visa first for similar reasons - so I feel like I'm actually tackling my debts, instead of going after the gaping voids of Egg and Capital One.

I don't know what I should do - I hate paying so much interest every month!

Any advice for me?

Mrs_J_3

I'm sure someone more competent than me will be along soon, but it looks like egg are taking your payment and applying it to the merchandise purchases first (i.e. the lower interest) and the cash advances last. In English, say you spent £500 on goods and £500 on cash advances, every payment you make will reduce the goods and once that is clear you start to pay for the cash, i.e. pay £250 one month and the balance becomes £250 goods and £500 cash advances. It's a sneaky trick and I've fallen for it too.

If you can't get the balance shifted onto a 0% card (which would be my first thought), could you transfer the money onto your other cards? I don't know the other aprs are on your cards, but it might be way to reduce the interest you are paying. I know barclaycard offer lower rate balance transfers, it might be worth looking into.

CLAPTON

basically you are paying 22.94% on most of you egg balance which is the cash element and paying 17.94% on the small purchase part.
In essense never ever take cash out on a credit card, because you pay typically 2.5% as a fee, interest from the day you withdraw the money and its usually at a very high rate.

personally i would snowball your debts , that is pay the minimum on each debt except the one with the highest APR on which you pay as much as possible. (in this case treat EGG as having 22.94% APR)