Is this cricket or not.

mppsbeag

Hi there I wondered if anyone could help?

I have a reasonable income of around £30k a year and I've been very stupid and managed to run up £31k in credit card debt on around 10 cards.

I am still however an impeccable payer and I haven't missed a payment.

However the debt is climbing and climbing and I've decided to sell my apartment in order to pay off the cards. The problem is once I've paid off the cards I'm only going to have around £3k left for a deposit on a new property.

Could you tell me is there any mileage in giving the credit cards a ring to reduce the final payment while still not putting a black mark against my financial history.. or am I just being cheeky... or are they just going to tell me to get lost.


Many thanks,

boobies

They will not entertain the suggestion of a reduced settlement whilst you are able to keep up the repayments.

thenudeone

If you want to buy a property with a mortgage then the last thing you want to is create black marks on your credit history which will happen if you say you can't pay and want to negotiate a lower final settlement figure.

The best thing both morally and strategically, is to pay off your debts.

wr1ght

what about balance transfers to 0% cards might give you a bit of breathing space

molerat

Where is the op going to get a 0% card from with over 100% of his annual income in CC debt already ?

Poosmate

Are these all interest bearing cards?

I think if you can afford to make the payments I would continue to do so.

However, I would open a new current account and set all the DD's to the CC's from there for the minimum payments. Set up a Standing Order from the acct where you salary is paid to transfer enough to cover your minimum payments plus a little more. When all of the minimum payments have been paid you should have a surplus in this new account. Pay that off your CC with the highest interest rate.

The following month your minimum payments will have reduced a little. When all of the minimum payments have been paid you will again have a surplus in this account (should be more than the first month). Pay this off your CC with the highest interest rate.

The more you pay off each month, the more surplus you'll have each month so the more you will be able to pay off. It's a backward spiral out of debt.

It's great because, once set up it will run itself and you only need to check in once a month to make that extra payment. Also, it separates your debts from your spending. What you have left in your salaried account is what you have left to cover living costs. You are (or should be) used to paying out for your CC's so shouldn't miss it.

THIS WILL ONLY WORK IF YOU HAVE STOPPED USING ALL OF THE CREDIT CARDS!!

I hope that helps.

Poo

Poosmate

molerat wrote: »

Where is the op going to get a 0% card from with over 100% of his annual income in CC debt already ?

This is true, however, with so many credit cards there's got to be one of the OP's existing cards that will offer 0% deals periodically surely?

Apart from stoozing and cashback, the only other positive on CC debt is that it's flexible and can be moved to lower interest or 0% interest cards/offers as they become available.

You really need to separate CC debt from "normal spends" because as the minimum payments go down you can see the benefit rather than have those little bits of extra cash get swallowed up in your day to day spends.

OP, if you are managing at the moment, manage better and don't trash your credit record. If you feel you are at the point where you may not be able to manage very soon then you are lucky to have realised before the house of cards comes crashing down. A couple/few months of very frugal living will give you a bit of breathing space and allow you to get onto an even keel. You may benefit from using these two sites:

http://www.whatsthecost.com/snowball.aspx

to help you pay off your CC's in the most efficient way.

and

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

to deal with your income/expenditure. For more help and guidance (if needed) please complete the form on the second link and post in a new thread on the Debtfreewannabe board.

Poo

blacksta

no chance of partial settlement without tarnishing your credit record - you have spent the money - man up and pay all back -

mppsbeag

thenudeone wrote: »

If you want to buy a property with a mortgage then the last thing you want to is create black marks on your credit history which will happen if you say you can't pay and want to negotiate a lower final settlement figure.

The best thing both morally and strategically, is to pay off your debts.

I think you're very right here.

Twas the way I was brought up.

Cheers

mppsbeag

wr1ght wrote: »

what about balance transfers to 0% cards might give you a bit of breathing space

I've been doing the balance transfer hokey kokey for the past seven years now. It's now got to the point where I have every card possible and I'm exhausting my options.

Thanks for the good advice though.

Cheers

mppsbeag

Poosmate wrote: »

Are these all interest bearing cards?

I think if you can afford to make the payments I would continue to do so.

However, I would open a new current account and set all the DD's to the CC's from there for the minimum payments. Set up a Standing Order from the acct where you salary is paid to transfer enough to cover your minimum payments plus a little more. When all of the minimum payments have been paid you should have a surplus in this new account. Pay that off your CC with the highest interest rate.

The following month your minimum payments will have reduced a little. When all of the minimum payments have been paid you will again have a surplus in this account (should be more than the first month). Pay this off your CC with the highest interest rate.

The more you pay off each month, the more surplus you'll have each month so the more you will be able to pay off. It's a backward spiral out of debt.

It's great because, once set up it will run itself and you only need to check in once a month to make that extra payment. Also, it separates your debts from your spending. What you have left in your salaried account is what you have left to cover living costs. You are (or should be) used to paying out for your CC's so shouldn't miss it.

THIS WILL ONLY WORK IF YOU HAVE STOPPED USING ALL OF THE CREDIT CARDS!!

I hope that helps.

Poo

That's really good advice but I'm at that ridiculous negative feedback spot now where my outgoings are more than my incomings. There's no luxury spot where I can pay off cards, it's at that horrilble point where the money has gone by the end of the month and you are turning to cash advances on cards to pay off the overdraft on ones current account.

The strange part is, I really cannot figure out how it all came to this. I'm pretty careful with money but over ten years if you spend a couple of hundred more a month than you earn then the debt really does leap up and grab you when you least expect it.

I thnk that the only way out of this is to pay up, sell the apartment and live with the folks for a bit.

Not pleasant but they're good old sticks and if they can put up with me then I can put up with them

Thanks again for all the sound advice.