Credit Card Debt

erasmus_2

Hi Guys,

I've had various unsecured debt that I have accumulated over the years. It stood at about £20,000.

Most of this was in the form of credit cards, store cards and overdrafts.

My wife took out a loan for £10,000 and paid off half of my debt. I have been paying it back to her each month. She very wisely took my credit cards and cut them up!


I still have a £10,000 credit card bill with Barclays. I am making the minimum payment each month at around £300, but this is hardly making a dent in the overall balance. I can't afford to make anymore.

My credit history is poor. I've been declined by Zopa and I contacted Barclaycard and asked if this could be converted into a loan and my card cancelled - they refused. I was told there are no current offers for my card at the moment and they can't help me because I am making the minimum repayment on time.

How do I get out of this one? Should I not make the minimum payment on time?

Would I be better

JimBobJones

Barclaycard have a habit of refusing to freeze interest and charges, you could miss payments and wait for it to default to a DCA who would accept a payment plan.

If the card is pre 2007 you could attempt to go down the "Unenforceability" route.

Do you have PPI on the card? You could attempt to claim back PPI and unauthorised charges to cut some of the balance off.

You could go down the hardship route and attempt an F&F, part or full write off of the debt, this rarely works though.

Tixy

Are any of the old credit card accounts that you cleared with the loan from wife still open (even if the cards have been cut up)?

If so you could look to see if any would offer you an existing customer balance transfers either at 0% or at a low life of balance rate.

What APR are barclaycard charging?

Does wife know about this debt? Are you financially associated with your wife? Do you have a mortgage?

erasmus_2

Thanks for your reply guys.

Yeah we have a mortgage.

The old accounts have been closed.

Yes, she knows about this debt.

Should I contact Barclaycard and close the account? I don't ever use it. Would they freeze the interest (approx. 28%) until I have it cleared?

Tixy

They won't freeze interest without affecting your credit file (at least an arrangement to pay and could easily be a default), and they are unlikely to freeze interest if you can afford the minimum payment.
And if you have a joint mortgage then if you default you are going to also affect your wife's ability to get credit, and could find it harder to successfully shop around for a mortgage.

Is there no way you could up the payments a little? reduce outgoings anywhere? increase income or a second job?

At £300 a month it will take 62months to clear a £10k debt at 28%.
But if you could pay £335 you could knock a whole year off that to 50months, and at £375 it would come down to 41months.

geekonthepc

As most have already pointed out, you're going to do more damage than it's worth by starting to deliberately missing payments and heading down the default route - particularly for your wife. By the sounds of it she's done enough to help already, keep her protected!

Barclaycard will however be reluctant to help because they they only have to help if you're unable to make payments. Like Tixy has suggested, I'd say your best option is simply to try and make cutbacks elsewhere and cut it down as much as possible. Lowering your debt should help your credit history - you might be able to get a balance transfer a little down the line.

JimBobJones

Anything that doesn't involve making the minimum payment will affect your credit file, it's a question of whether this matters or not. Anything that happens to your credit file now will be gone in 6 years. If you have a mortgage already with no plans to move for 6 years, then it would affect your wifes credit file too, however in 6 years in won't matter.

The only reasonable solution is to open a lower APR% line of credit to clear the balance of the credit card. A lower APR would mean lower minimum payments, as minimum payments tend to be just above the interest mark. If you get a loan at 18.9%APR over 6 years you would pay £230.76 per month. I have a spreadsheet to work it out.

This would take longer than Trix's method but the lower monthly payment may be beneficial?

dancingfairy

How is paying off the wife going? Hopefully you are making good progress on that, as once that is paid off the money you are using there will knock spots off the barclaycard (you'll get it paid in double quicktime).
df

tuttifruiti20

Have you considered looking at a part-time job to boost your income? If there are minimal costs involved, such as petrol or clothing required, then you could put all of most of this extra money towards it. Even if you did a job for 10 hours a week at minimum wage that could be another £200 a month from your debt, knocking several years off.