Bit of a mess

loug_2

Hello
Wondering if anyeone might be able to offer some advice?
I currently have £22854 worth of debt spread across 3 credit cards;

• £4540 on Barclaycard APR 16.9%
• 5059 on Santanda APR 25.9%
• 13,255 on MBNA APR 29.9%

At the moment I am making the minimum payments each month which come to roughly £500 a month. I can just afford to pay them although it leaves me little left over each month.
At the begining of the year I had that LBM that people on here talk about and I am so determinted to pay some of this debt off this year. I have tried applying for a loan and/or another card with a much lower interest to shift some of the debt over but no surprises no one will lend me any money (even though my credit rating is very good). I also tried contacting MBNA this morning to see if I could get the interest frozen even if just for 6 months so that I can feel like I am actually paying some of the debt off but they were not having any of it.
I have cashed in some shares from work totalling about £1500 and I have some jewellry to sell which I think I will get about £1000 for. I just wanted your recomendation as to what I pay off first? Logic says MBNA yet I feel like I would just be paying the interest only and what I really want to do is use that money to actually pay off the loan. What I would really love to do is get rid of one card so do I aim to pay off Santanda this year and get rid of that card?
Or do I just admit defeat and opt in to a DMP???

Thanks in advance for any advice anyone may be able to offer.

Yours,
Clueless....

opinions4u

If you're committed to paying off your debts, clear MBNA first.

If you want to improve your credit rating (slightly) pay £1 more than the minimum payment on each card.

If you want to free up more of your income, go to www.makesenseofcards.co.uk and complete a statement of affairs. Post it and see what suggestions you get.

If you want to increase your income, even if only by a bit, go to the Up Your Income part of this forum. Overtime, market research, surveys, part time bar job or whatever - just make sure you allocate all proceeds to paying off the most expensive debt.

Nat0273

The interest you are paying is ridiculous ! I have similar amount of debt and was facing min payments of 600 with most of interest, I admitted defeat and sent them all a statement of affairs after ringing nàtional debtline as I already know I have cut back everything I can
Mbna were very sympathetic and agreed my offer of payment and froze the interest to 0percent! Although you have to be careful they will default the account after 7months as you will be classed as in arrears, but I found out that if you can agree a payment that is enough to pay off the account in 5 years they will not default you it is called a formal reduced payment programme so ask about that

Not sure if any other cards do that - Barclaycard reduced apr to 6.9percent and accepted my payment but it says they will let the credit ref agencies know you have agreed a repayment account they will review it in 11months

It is a lot to consider but if you can only afford the min payments and not anymore you will be paying it off for the next 30years! I would suggest getting some impartial advice from national debtline or the like first !

jon1965

Hi
i am a bit concerned that you think youre credit rating is very good when you have taken cards out at 29.9%. That is store card territory.
You say you have tried to take out other cards, did you try to do the balance transfer on the application form?
I have to also say I think it is scandalos that MBNA give you that sort of credit limit at that sort of APR.
One other suggestion is to ask Barclaycard to increase your credit limit and transfer some of the MBNA balance.
Ultimately however I think you maybe need to take it on the chin screw your credit rating and go down the DMP route.
Nat gave some very good advice though.
Have you given national debt line a call.....

loug_2

Thank you for your advice.
I applied for my credit check through experian about 6 weeks ago and on a rating of 0-1000 I scored 966 and was in the 'green.' The only thing putting lenders off lending me further money was because I already owed so much. I guess because I have never missed a payment and always made at least the minimum payment it did not make a huge amount of difference.
I have a feeling a dmp is going to be my only way out...

Tixy

If you can meet your minimum payments then you may well find that you don't qualify for a DMP.

Have you prepared a statement of affairs and then looked through all your expenses to see where any savings could be made (eg by switching suppliers, reducing spending etc).

If you could free up a bit more each month, and have the lump sum to make a reduction to the balance then you'll start making inroads in to the debt. And maybe then in 6-12 months when the debt is less you might then be able to apply for another card and shuffle the debt around.

Maybe go to the debt free wannabe section of the forum and post up a statement of affairs for people to see if they can help suggest areas you can free up a bit more for debt repayments.