Advice please

anrutpea

Hi everyone I'm a first time poster so please be kind and non-judgemental

I'm in a bit of a sticky situation and am hoping for some advice.

Funding ran out for my job in July 2010 and I was unemployed for 6 weeks before securing permanent employment. At this time my partner and I had moved back into his parents' house to save money to move into a house of our own.

To build my credit score to secure a rental on a house my partner asked his mum if we could move our £3000 debt onto a credit card of hers that she wasn't using. It was 0% balance transfer at the time. We couldn't get credit at the time.

His mum agreed as long as we paid all the monthly payments. This went well for some time until Christmas came and we realised his mum had been making cash withdrawals from the credit card to buy Christmas presents.

We have now frozen the card so no further debt can be put on the card but are in a position where we each owe about £2500 on the credit card.

Neither of us can buy the other out so we are stuck in this joint debt situation. The minimum payment is £200 a month and we pay £100 each but neither of us are making a dent in the balance. Basically it's like throwing £200 a month away.

His mum doesn't earn a massive wage so can't afford any more repayments and I'm worried about making overpayments because it's hard to keep track about whose balance is what and I think I'll end up paying more off as I can afford to pay more than his mum.

I appreciate in hindsight this was a stupid thing to do. I genuinely didn't think his mum would use the card, but it was generous of her at the time to allow us to use the card and it is her card at the end of the day she is entitled to spend on it.

How can I reduce the minimum payment and make a dent in the balance of the credit card? Can I ask the bank to reduce interest then I can make overpayments and perhaps keep a spreadsheet to show what I have paid? I am not sure what the interest is on the card but I know it is rather high.

I feel really out of control here and it's a delicate situation as it is family.

Any advice please?

molerat

The only way I can see is for you to get a 0% card / loan for yourself and transfer / pay off your agreed half. Rule 1, Never make purchases on a 0% BT card, it will only end in tears. That must have been some christmas oh's mother had !!

balmk

Does the card statement give you a breakdown of the interest charged, e.g.

Interest:

Cash advance @ xx% - £xx.xx
Purchases @ xx% - £xx.xx
Balance transfer @ xx% - £xx.xx

If it does you can easily track how much you actually owe and how much you have paid off.

The problem here is everything you pay off the card goes towards the highest interest items first, so all you are doing is paying against the cash advances.

anrutpea

Thanks for the post. Neither my partner nor myself can obtain credit for another 0% card.

I think his mum first used the card to buy my partner's birthday present at the beginning of December then fell into the trap of how easy it was so bought some Christmas presents for her 3 kids and then needed her hair done so withdrew some cash and it kept spiralling from there.

We didn't know about it until she had matched our debt.

There is no way of borrowing more to pay off our part of the card. The only way is to pay the debt off but the interest rates means we are only meeting minimum payments

anrutpea

Thanks Balmk I don't see the statements, they are posted to his mum's house she notes the minimum payment tells my partner and I pay the minimum payment then she gives me £100 cash.

I told my partner as he was handling statements from his mum and I never saw them to make a spreadsheet of what we were paying and what his mum was. I pointed this out at the start because all the payments will show as a lump sum from me and it won't be clear who has paid what.

I know again this is my fault as I should have taken ownership myself and made a log myself. I tread on egg shells around his family so don't want to be too pushy as I know it will be thrown in my face ultimately that it is her card and she did us a favour.

I am now taking a log of who pays what as we will be trying to make overpayments where possible. I just wish we could get the interest down as the cash advance withdrawals have hiked up the interest.

I am quite a worrier about money and debt and want to pay it off and understand I cannot get debt. His mum isn't bothered about debt and has a 'they can't take it off me when I'm dead' attitude. Obviously I didn't know this at the time of using the card. I feel very foolish to have put myself in this position with family. I hate that I have debt on someone else's card and I can't pay it off quickly

SCO

What is your credit report like?

Would you be able to get a credit card from your bank?

You have no short term options i can see, apply for a vanquis or similar cards and start building up your credit report by putting your monhly spend on it and PAY OFF EVERY STATEMENT IN FULL as they charge very high rates.

You will never pay off the the credit card with your debt on as the APR is likely to be 29.9% or higher on cash advances and between that and your debt being charged APR you will ither never pay it off or take something like 80 years.

anrutpea

My credit report is just ok. My grandad died in June after a month in hospital and dealing with that and the aftermath I made a few late payments on my credit cards which have damaged my credit report.

I have a credit card with my bank but it only has a £500 limit and I have a balance of £450 on it. I have another credit card with a £1500 limit and have a balance of £1450.

I make regular payments but as you can imagine paying 3 credit card overpayments mounts up to a lot of money as I am paying 3 debtors.

Hopefully after June my credit score might repair a bit after I demonstrate that I have made regular payments on time.

SCO

anrutpea wrote: »

My credit report is just ok. My grandad died in June after a month in hospital and dealing with that and the aftermath I made a few late payments on my credit cards which have damaged my credit report.

I have a credit card with my bank but it only has a £500 limit and I have a balance of £450 on it. I have another credit card with a £1500 limit and have a balance of £1450.

I make regular payments but as you can imagine paying 3 credit card overpayments mounts up to a lot of money as I am paying 3 debtors.

Hopefully after June my credit score might repair a bit after I demonstrate that I have made regular payments on time.

You are maxing out your available credit, so even though you are making the payments you will scare any future 'good' providers away.

Concentrate on getting your credit cards down to about half the available credit.

If you know you have the disipline to pay it off, get a vanquis card or aqua type card and use it for your daily spending then pay off every month. This will show you dont max out every card you get.

Then in 6 months or a years time try for a 'good' provider that will give you a long balance transfer offer.

anrutpea

Thanks for the advice maybe I did the wrong thing I decreased the credit limits as I was making payments on my credit cards. This was to avoid racking up more debt. Now I cannot increase the credit limit on my existing cards.

That would probably give a false sense that I am always at the maximum limit of my cards but that was through voluntarily reducing the limits then I found out his mum had spent on the other card.

I will keep making a dent in my credit card balances and hopefully transfer some amounts off his mums card until I have cleared her card.

Miss_Spendalot_2

If all you are doing is paying off the interest on the cash advance I would just tell HER to keep paying it until she had got it down to where you left it.
Yeah okay she did help you out in the beginning but now because of her you are in more trouble then before.
I would say work out what would be your minimum payment on the £2500 give her that to cover your bit let her pay the rest towards the minimum payment total and then put some of your money away somewhere else until you can pay the credit card company the £2500 you owe..

Moneymash

I'm not sure what the problem is here. The APR on the cash advance isn't your problem. You put £3000 on the card when it was 0% for balance transfers as long as you can prove you have paid a total of £3000 towards the card whilst the 0% for balance transers is still active that is all you need to do. The sooner you can do this the sooner your debt is cleared. The remainder of the card balance and interest is for the card holder to deal with. Just make sure you keep a record of what you have paid.

If anything you are doing the card holder a favour as you are reducing her interest with payments you are making towards the initial balance.