10K CC Debt Cycle

Deru

I have a friend with just under 10K debt on 4 credit cards. All barclaycards it seems.

Interest rates have already been slashed to 2.6%and 2.2% (both cash and purchases) but he's still paying £200 odd in interest PM plus over limit / missed payment charges at £12 a pop.

About 20K income.

Told him to spend less already.

I don't think he'll qualify for a 0% balance transfer card with that record (or can he?)

Besides contact CAB? Not sure his pride would let him...

That and not for me to lend him 10K or for me to do a balance transfer in my name. He's already asked for that! Even if I do have that money in my account, I'm sure it's generally a bad idea and I've only ever done it for my mum...

Any general advice?

CLAPTON

are you sure interest rates are 2% ; it would seem they are 2% per month i.e. about 26% APR

tell him to post on the debt free wannabe board unless his 'pride' stops him.

Cat2011

It's either reduce his spending or increase his income. Send him the link for the debt free board, and tell him to post up an SOA, the people on there will help him reduce his spending. Also needs to sell stuff/everything (what was the 10k spent on?), and get a second job to boost his income.

He could perhaps try for the poor credit 0% card, but they tend to be for short periods, but might be better than nothing. He'll need to do the math.

THe debt info on here will be useful to him. http://www.moneysavingexpert.com/loans/debt-help-plan

He could also try the CCCS https://debtremedy.cccs.co.uk/start.aspx or National Debtline https://www.mymoneysteps.org/ online tools.

Deru

Thanks for responses.

CLAPTON wrote: »

are you sure interest rates are 2% ; it would seem they are 2% per month i.e. about 26% APR

I very rarely pay any interest on credit cards so not sure... are they monthly figures? Maybe they haven't slashed the interest? If it says...

Interest On Your Standard Balance
INTEREST 2.207%

Interest On Your Cash Balance
INTEREST 2.207%

Interest On Your Default Sum Balance
Default Sum Interest Rate 2.207%

The cash rate seems cheap to me as I imagined they'd be higher....to me it looks discounted. I'm interested to know how those work. 2.2 x 12 would be indeed 26%.

He's really not the type to post on forums. At most, he'll ask me at the moment as I've lent him money on multiple occasions (he has paid back each time). I already sent him a link to the Soa and told him to do a spending log but no response on that front.

Is it worth telling him to talk to the card company to try to get a rate reduction? Do these requests typically work? My BarclayCards are 16% so surely Barclays can reduce them. I believe he's managed to get some of the fines refunded by complaining one way or another.

I will mention CCCS to him. I mentioned CAB to him previously, but wanted to find the most immediate things he could try with Barclays.

Poor credit 0% card sounds interesting.

londonTiger

ouch, sometimes reading stuff like this helps feel better about my £900 credit card statement.

[Deleted User]

Deru wrote: »

I very rarely pay any interest on credit cards so not sure... are they monthly figures?

The ones you posted are definitely monthly

Deru wrote: »

Is it worth telling him to talk to the card company to try to get a rate reduction? Do these requests typically work? My BarclayCards are 16% so surely Barclays can reduce them.

They can. But it's doubtful they will. You are a much lower risk than he is. You spend and pay off. He spends but isn't so good at the paying off bit.

geoffky

20k debt..the guy is in a whole lot of trouble because he has just let it build and build and a redundancy could wipe him out for a very long time..He needs to man up about the debt....and dont even think about a loan..where is his longterm planning..he is living just for today..

Deru

It's 10K.. well, technically, just over 9K but I rounded up for simplicities sake.

I think rent, utilities, Virgin, mobile phone and the interest he's paying is what got him there. That and don't think he was earning much previously so the debt grew. Plus he lent money out using his credit card to help someone but didn't get the money back. (that's 2K odd) Yes, stupid I know. I remember lending him £500 years ago from my credit card (lol).

He lets me look at his statements and I've moaned at him about him eating out at some places (£30-£50) a pop (even if only once a month) and refusing to cut out of £7 lunches each day.

Personally, I don't know how anyone can manage this but guess it happens. As he keeps asking me for loans and I really feel bad for him, I'd like to get as many tips as possible here.

Thanks so far.

Where do I look for poor credit 0% cards? Never even heard of those TBH.

Is it worth suggesting to him to switch utilities providers or have they all followed with the price rises?

geoffky

He is going to have to manage because the debt will not go down on its own..He will get the credit plug pulled on him and then its you he will look to,do not bail him out as he will not learn the lesson he needs...good luck

missile

He would be better with a loan (from a bank - not YOU!) and clearing his CC balance. However, I guess he would just spend even more and max out his CC card again.

Many find it hard to live within their means and some never learn.

camuk81

Can I make a recommendation that you fill in a statement of affairs and shows how bad his spending is every month.

You seem to have a good grasp and maybe he should face up to it.

Other then that let him make his own mistakes