Dealing with a credit card bill

unabatedshagie

Apologies if this is the incorrect place to post this, kind of new here. :-)

I have amassed a credit card bill (around £7500) and am currently paying around £200 a month towards it. As you can imagine most of that is going on interest and my bill is not going down very quickly.

I can't really afford to pay more than that unfortunately.

I'm not really sure what I can do about it though, I had thought of getting a loan but I think my credit rating is too low to get one although I don't know this or know how to find out if it is or not? One of the reasons the cc bill is so high is because I was using it to live on when I lost my job about 3 years ago.

I did contact them about trying to come up with some sort of payment plan but they said that because I have a loan and mortgage I would have to also work out a plan with them too? They weren't very clear about it though.

What options do I have?

[Deleted User]

I'd advise posting an SOA, so the good people on MSE can advise on where to cut back on spending, and the best way to tackle your debts.

http://www.stoozing.com/calculator/soa.php

happy_bunny_2

Best post SOA as suggested. They will probably get you to take a new loan with them or add it to the mortgage if you have equity. all bad ideas...

While you continue to pay, they won't really help you. If you stop, your credit rating will be trashed for 6 years and its not great if you have other accounts as you do.

unabatedshagie

happy_bunny wrote: »

Best post SOA as suggested. They will probably get you to take a new loan with them or add it to the mortgage if you have equity. all bad ideas...

While you continue to pay, they won't really help you. If you stop, your credit rating will be trashed for 6 years and its not great if you have other accounts as you do.

I'll sit down with my gf and fill out the SOA tonight.

So by the sounds of it I'm screwed if I continue to pay and if I stop paying? :-/

happy_bunny_2

unabatedshagie wrote: »

I'll sit down with my gf and fill out the SOA tonight.

So by the sounds of it I'm screwed if I continue to pay and if I stop paying? :-/

They want to make as much cash from you as possible, end of story.

What bank is it?

If you have a current account with them too, If you think you will miss payments, before you do miss any payments, get a bank account with an unlinked bank and get your wages in there. Or they can help themselves.

Folks will advise when you have dine the SOA.

unabatedshagie

happy_bunny wrote: »

They want to make as much cash from you as possible, end of story.

What bank is it?

If you have a current account with them too, If you think you will miss payments, before you do miss any payments, get a bank account with an unlinked bank and get your wages in there. Or they can help themselves.

Folks will advise when you have dine the SOA.

Credit card is with the Clydesdale, I don't miss payment now, I haven't in nearly 3 years since I got my new job. My bank account is with a different company.

unabatedshagie

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned....................

Monthly Income Details
Monthly income after tax................ 1375
Partners monthly income after tax....... 575
Benefits................................ 680
Other income............................ 0
Total monthly income.................... 2630

Monthly Expense Details
Mortgage................................ 240
Secured/HP loan repayments.............. 200
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 120
Electricity............................. 60
Gas..................................... 35
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 100
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 45
Groceries etc. ......................... 240
Clothing................................ 20
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 50
Childcare/nursery....................... 480
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 40
Contents insurance...................... 0
Life assurance ......................... 15
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1677


Assets
Cash.................................... 0
House value (Gross)..................... 70000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 70000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 34000....(240)......2.4
Secured Debt.................. 10000....(200)......0
Total secured & HP debts...... 44000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................7500......200.......0
Total unsecured debts..........7500......200.......-


Monthly Budget Summary
Total monthly income.................... 2,630
Expenses (including HP & secured debts). 1,677
Available for debt repayments........... 953
Monthly UNsecured debt repayments....... 200
Amount left after debt repayments....... 753

Personal Balance Sheet Summary
Total assets (things you own)........... 70,000
Total HP & Secured debt................. -44,000
Total Unsecured debt.................... -7,500
Net Assets.............................. 18,500



By the looks of this we should have close to £1000 spare each month. It sure doesn't feel like that. We rarely go out, neither of us smokes or drinks. There are probably other things we have to pay which don't seem to be listed, probably another £200 or so I'd say.

Not sure what this can tell you , apart from the fact that we aren't good at managing our money. We don't have any savings.

I really just want to get a loan to cover the credit card bill and use the money I'm paying for that towards the new loan. However my gf says that if you have bad credit and try to get a loan it can set you back even more.

heyjude2013

Hi if you don't know where the £1000 goes then firstly you need to start a spending diary to work or where it does go!!! If its just frivolous spending rather than 'essentials' cut it out and start making headway into that credit card!

Your gf is probably right, getting a loan is rarely the right answer.

£100 on mobile phones seems a lot to me.

unabatedshagie

Why isn't getting a loan the right answer? As it stands I'm paying what £100+ in interest and taking very little of my actual balance. With a loan I know exactly what I'm paying and how long it's going to take me. I've been paying (or trying to) pay this credit card off since I started my new job and I've barely made a dent in it. If I had a loan I'd be 3 years into paying it off. The reason I don't want to spend more on the credit card payments is I feel like most of it's going to paying the interest and not the actual debt.

It's not exactly £100, I just rounded up. It'll drop by £20 when my third contract finishes next month and it'll drop even further the month after that when one of the contracts is due to end and I'll get a lower cost one.

laidbackgjr

unabatedshagie wrote: »

The reason I don't want to spend more on the credit card payments is I feel like most of it's going to paying the interest and not the actual debt.

Every extra £1 you pay towards your credit card does 2 things, if you think like this it might help encourage you paying some more.

1) All the £1 goes towards debt repayment, the min payment is what covers the interest.
2) By paying even just £1 more, you'll pay less interest next month and therefore if you pay the same the next month more will go off the debt rather than on interest.

harrys_dad

Once you know where your money is going (spending diary) then you can see how much you have left to pay down your debt. Even if you have £500 a month rather than £1000 you can pay down your credit card in less than two years. The quicker you pay it off, the quicker the debt goes down and the less interest you pay. Check the snowball calculator to work out exact amounts/time etc.

There are many posters on here who will tell you they took out a consolidation loan, paid of their CCs, then started spending again and ended up with loan and credit card debt.

Much better just to pay down the debt as fast as you can, so the interest reduces as you pay it off.