Overdraft + credit card - help!

tigermax

Hi

I posted recently about my overdraft which HSBC wanted paying back pronto. I made them an offer for monthly repayments which they accepted on the condition that I consolidate my overdraft with my credit card into a loan at 13% APR.

I had been paying off the credit card every month with no missed payments. Is this usual practice in this situation? I can't work out whether they're doing me a favour or not?!

Any advice much appreciated.

warburtonrichard

Well I'd say they weren't doing you a favour, they were guaranteeing themselves some interest revenue on a customer who would otherwise have a high probability of moving his debts elsewhere.

I think there are probably half a dozen better ways to manage this, but without more details, the nice folks here are stuck. Why not take the opportunity to take advantage of the goodwill of the folks on the board here to help with your SOA and planning to help you get the cheapest solution.

I'd be prepared to bet my back teeth on there being a cheaper, better solution than a consolidation loan at 13%..

in_debt_again_but_dealing_with_it

I've just started a dmp all my debt with hsbc and they want me to go with managed loan (consolidating pl, od and cc) interest is massive as would be over 12 years, the debt would double!! Spoke to cccs and thankfully don't have to go with it ... phew.
I'm where I am cause hsbc kept consolidating and then increasing my cc limit!! Wasn't forced to spend it but temptation always there. I'd say beware!!

tigermax

Thank you both for your replies. Richard, what information could I provide to give a more detailed picture? I'm not sure what an SOA is?

Sorry, I'm new here and still learning the lingo.

Bargain_Rzl

An SOA is a Statement of Affairs - a full picture of your finances. See this post for information.

tigermax

thanks, I'll take a look.

tigermax

Here are some more details, I hope this gives clearer picture.

INCOME

my salary £0
partner's salary (after deductions) £2000

No benefits currently


OUTGOING (monthly)

Mortgage £830
Gas £25
Electric £25
Council tax £90
Water £40
Phone and internet £40 (currently changing to cheaper deal so will be £25 soon)
TV licence £11
Car insurance just paid £380 upfront for 12 months
Petrol £40 max
Bus £32
Food £120
Pet insurance £10

Halifax CC £30
HSBC CC £24
Egg loan £45


I hope this goes someway to giving a better picture. Please tell me if there are any glaring omissions.

Thanks for any help.

Storm

Hmm, why have they asked you to pay back the overdraft? How much is the O/D? How much is on the CC & at what APR? Can you make overpayments without penalty on the loan?

These are the questions I'd be asking the bank (though obviously you already have some of the answers). I don't quite understand how they could accept a monthly amount to pay off the overdraft, but then insist you take a loan to consolidate the O/D & CC

You could always try applying for an A&L account - they advertise that they'll match your current O/D limit & give you 0% for a year on the first £1000 I think...

tigermax

Thank you for replying Storm, much appreciated. There is £727.04 on the CC. They asked me to return the CC to them as I was considered a security risk. I did as they asked and have continued to pay off the minimum each month. I know this isn't ideal but is all we can afford currently.

The OD is £1450. They have asked me to pay it back as there has been nothing going into the account for over 12 months as I haven't been able to work. This is fair enough and I was kind of expecting it. I offered to pay back the OD at £30 a month and then hopefully pay it off fully when I start work again.
They have written to me saying they accept the offer on the condition that I agree to a CL for the OD and the CC (15%APR) of £2250 payable over 144 months. Having read the small print, there is a penalty for early payment.

I am hesitant to sign the agreement they sent until I get the full picture, hence my postings here! I will also phone the CCCS, are they the best people to call?

I just feel in such a pickle.

Storm

OMG! :eek:

£2250 over 12 years? And how much a month, about £30? That would mean you'd end up paying at least double the amount back in interest! Unless the interest on your O/D is phenomonally high this is going to be a complete swizz!

If you're not actually using the account at the moment I would tell them where to shove their loan! Give PayPlan/CCCS/CAB a call for advice on agreeing repayments with them, but in the meantime pay them the £30 a month you can afford.

tigermax

Storm, thank you so much. I suspected it was a big fat rip-off. I felt that they had me in a corner though and I had to agree to it. Yes, it definitely says, "loan ends April 2019".:eek: Just testing a smilie there, sorry!

I will give the CCCS a call and see what they say. Can they force me to agree to the loan? Can I not just continue to pay the minimum on the credit card and pay the £30 off the OD until I have a job and can pay more?

Sorry for all the questions. You've been really helpful, much appreciated.

Tigermax