Debt help

MB1980

Hi everyone,

I have a couple of credit cards with Halifax and Virgin. Both have about £3500 left on each. I pay over the minimum payments to try and reduce the debt, but all of it is going straight on the interest.

On Halifax the minimum payment is around £49, I pay between £70-80 a month and Virgin (which is the killer!) minimum payment is around £100 and I pay £120..... it simply goes down by £10 a month I feel like i'm getting nowhere.

I do have two small debts with Next and Freemans, but these i'm managing fairly well, it's just the credit cards that are sucking my money making my efforts feel worthless.

Due to injuries I have to have three times a week chiropractic and counselling appointments which really has shown me just how reckless I have been with money, now that I need every penny to get myself better.

Any words of advice would be greatly recieved x

makinganeffort

Best advice I got was to open a 0% credit card (or at least a low interest card). That way the money you pay goes directly off the debt.

I am assuming from your post that you owe approx £7000? Depending on your income and credit score some of the credit limits offered can be as high as this.

Check out the MSE website for the best deals.

If you can't get one of these (or more than 1 if needed) then you could consider a loan for the full amount owed. As long as the interest rate is lower you should be better off and the fixed nature of the payments could suit.

I'm no expert mind as I am in a mess myself but this website really helps.

MB1980

makinganeffort wrote: »

Best advice I got was to open a 0% credit card (or at least a low interest card). That way the money you pay goes directly off the debt.

I am assuming from your post that you owe approx £7000? Depending on your income and credit score some of the credit limits offered can be as high as this.

Check out the MSE website for the best deals.

If you can't get one of these (or more than 1 if needed) then you could consider a loan for the full amount owed. As long as the interest rate is lower you should be better off and the fixed nature of the payments could suit.

I'm no expert mind as I am in a mess myself but this website really helps.

Thanks so much for replying and your advice.

Unfortunately my credit score is low for another credit card and I applied for a loan before to consolodate the two credit cards, but I was told that I have too much credit elsewhere (I had to take out a £6k loan for my parents which they pay the repayments, however it's still under my name).

makinganeffort

Have you reduced the credit limits on all your cards to just the balance? They will consider the amount of credit you have to be the actual amount you *could* borrow, not what you have.

It could also be worth a call to one of the providers you have to ask for any promotional deals for balance transfers? You may be able to move some of it from one card to the other.

Good luck.

Tixy

Hi

Have you worked out the maximum you can afford per month to all your debts?

What are the APRs on all your debts? - Have you compared these to see which is costing you the most? and if so ideally you should make any overpayment above the minimum to that card.

Are both cards still active? and do either have credit limits significantly higher than the balance? If so have you looked to see if either are offering any balance transfer deals at the moment?

If you are not sure how much you can afford per month in total then it might be worth preparing a statement of affairs to see where your money is going and how much you should have left for debt repayments after living costs. http://www.makesenseofcards.com/soacalc.html
You might also want to post the results on here to see if people can spot areas you could save money / get things cheaper / try to cutback so you can throw more to the debts each month?

MB1980

Tixy wrote: »

Hi

Have you worked out the maximum you can afford per month to all your debts?

What are the APRs on all your debts? - Have you compared these to see which is costing you the most? and if so ideally you should make any overpayment above the minimum to that card.

Are both cards still active? and do either have credit limits significantly higher than the balance? If so have you looked to see if either are offering any balance transfer deals at the moment?

If you are not sure how much you can afford per month in total then it might be worth preparing a statement of affairs to see where your money is going and how much you should have left for debt repayments after living costs. http://www.makesenseofcards.com/soacalc.html
You might also want to post the results on here to see if people can spot areas you could save money / get things cheaper / try to cutback so you can throw more to the debts each month?

I closed both cards when I realised my spending was getting out of hand - thankfully!

I know that my Virgin card has the highest APR. Something like 24%. I don't know the exact APR of the Halifax card, but I know it's lower than that. I think both cards, before they were closed, would have about £1000 credit on each.

I will prepare an SOA and see where the money is going.

Tixy

If your Virgin is the highest APR then it would make sense to pay as much as you can to that debt. At the moment you are paying maybe £30 a month to halifax that would be better going to virgin (in terms of the overall interest you will pay).

It would be worth looking at a snowball calculator to see the best order to repay the debts and how long it will take overall - there is this stand alone calculator, you need to enter the balance, APR and minimum payment % for each debt http://www.whatsthecost.co.uk/snowball.aspx

or there is a follow on calculator on the statement of affairs which takes the info direct from there.

MB1980

Here's my SOA.... I really don't know what I with the £200 i'm meant to have left over!!

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Monthly income after tax................ 1109
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1109
Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 50
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 29
Mobile phone............................ 28
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 40
Clothing................................ 30
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 88
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 284
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 35
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 644

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts
Unsecured Debts
Description....................Debt......Monthly...APR
Halifax .......................4000......49.76.....14.9
Virgin.........................3384......98........0
Freemans.......................1776......100.......26.4
Next...........................96.06.....9.05......25.9
Total unsecured debts..........9256.06...256.81....-

Monthly Budget Summary
Total monthly income.................... 1,109
Expenses (including HP & secured debts). 644
Available for debt repayments........... 465
Monthly UNsecured debt repayments....... 256.81
Amount left after debt repayments....... 208.19
Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -9,256.06
Net Assets.............................. -9,256.06
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

Tixy

Regarding the £200 left over - sounds like you are using £30 to halifax a month and £20 to virgin, so thats £50 of it so far.

But in terms of the rest of it you do need to try to track it down, especially as you have relatively few outgoings.

Does £40 include all your food for a month, if so it looks quite low, or is it just things like lunches at work and the rest is paid by parents perhaps?

Obviously medical is high but that includes your treatment. Slightly obvious question but did you work that figure out by multiplying the weekly cost by 4? or by 4.33? If you only used x 4 then you will be underestimating the cost over a year (which could be more of your missing money).
Are you paying for any prescriptions in that money? if so have you looked to see if a prepayment card would be cheaper?
If you wear glasses have you included a budget for eye tests / glasses / contact lenses etc?

In terms of entertainment - try to think if that covers everything from nights out in the pub/or meals out, hobbies, buying things like books/magazines/computer games / things like lottery tickets etc). Just trying to guess at things you might spend on!

If you are a girl (or even a guy) have you budgeted for make-up, hair products, toiletries etc anywhere

Angry_Bear

MB1980 wrote: »

Here's my SOA.... I really don't know what I with the £200 i'm meant to have left over!!

You wouldn't believe how common that is! The general suggestion is to keep a spending diary of every single penny you spend to work out where it is going.

Medical (prescriptions, dentist etc).... 284 - Wow! What is this for - can it be reduced or can you get assistance with this?
Haircuts................................ 35 - every month? Can you reduce the frequency or find somewhere cheaper?

Edit: I see the medical costs are for your injuries - is there any way you can get some of this on the NHS or get some help with the costs?

MB1980

Tixy wrote: »

Regarding the £200 left over - sounds like you are using £30 to halifax a month and £20 to virgin, so thats £50 of it so far.

But in terms of the rest of it you do need to try to track it down, especially as you have relatively few outgoings.

Does £40 include all your food for a month, if so it looks quite low, or is it just things like lunches at work and the rest is paid by parents perhaps?

Obviously medical is high but that includes your treatment. Slightly obvious question but did you work that figure out by multiplying the weekly cost by 4? or by 4.33? If you only used x 4 then you will be underestimating the cost over a year (which could be more of your missing money).
Are you paying for any prescriptions in that money? if so have you looked to see if a prepayment card would be cheaper?
If you wear glasses have you included a budget for eye tests / glasses / contact lenses etc?

In terms of entertainment - try to think if that covers everything from nights out in the pub/or meals out, hobbies, buying things like books/magazines/computer games / things like lottery tickets etc). Just trying to guess at things you might spend on!

If you are a girl (or even a guy) have you budgeted for make-up, hair products, toiletries etc anywhere

I'm lucky enough to have such low rent due to still living at home, parents have been very supportive. The £40 relates to my low fat foods I buy that I don't feel my parents should fund.

As for the medical expenses, I did times those by 4 and that includes (at the moment, they change on a monthly basis) x4 Chiropractic appointments and 4x Therapy sessions. No real prescription charges right now. Unfortunately, I've had all the treatment I can out of the NHS, they've said they can't do anymore for my poorly hip, hence having to result to private care.

I guess I put all my toiletries/beauty products under the 'entertainment' part for when I go shopping with my friends.

The annoying thing is, due to my hip injury, I don't really do much or go anywhere lol. I had to give up all my gym and dance hobbies.