Oh My God, Amex Just Killed Me

chevalier

Ref the bit about using credit cards because people are overspending.

I would like to point out that many people do as myself and OH do, which is to spend on the credit card to get cash back, to keep our money in our current account for longer (and thus get a bit of interest there), and then pay back in full at the end of the month.

chev

Steel_2

Thought I'd join the post at this late stage with some other ideas for you.

Before anyone starts jumping on me for some of these ideas, I'm in debt too and I hate it, but I'm not going to take my anger and frustration about my situation out on Robflh. By the way, before we all rush to condemm credit cards, The Money Diet book is clear about the fact a credit card is a form of loan. If you need money and can get a card at a rate that's lower than the lowest 'loan' APR use it. All credit, whether it's a home owner loan, house loan, career loan or credit card is the same thing - money on credit - only bad thing is the interest rate and our inability to manage our money properly. Now, I'm not going into the particular's of Robflh's credit cards and APRs so please don't comment listing the APRs from previous posts as demonstration that he doesn't have the lowest. My comments above are general and at this point nit-picking doesn't help Robflh.

Robflh:
When our back are up against the wall, when we're tense and scared, we lose the ability to be creative. And that's what I think you need - creative ideas.
One thing I do at these times is have a massive 'free association' brainstorm session where no idea is rejected as 'daft'.

You need £3000 to get the house finished right? Put aside the issue of money for now and let's just say you need to get the house finished somehow. Start off a brainstorm by coming up with as many ideas under the following banners as possible (hold nothing back; every idea, even daft ones, have the potential to lead onto others):

Buy
Beg
Borrow
Steal
Trade
Win
Rent
Make

Here are some ideas in addition to the ones that others have come out with, such as sell the house and take less money etc. Some of them walk a thin line so beware. Also some may not work out and leave you in a much bigger financial hole....

1) Take on a lodger - perhaps a Polish or Czek builder who charges less than most English builders yet whose work is good and has a good reputation - and offer them some form of free rent and bills in exchange for him buying the materials and doing the house. If you have a Polish or Czek community in your area you could put a wanted ad up in their local Polish supermarket.

2) Trade your services or something of value for that of a good builder to come in and finish the job. They buy the materials etc you work off the money. (For example, I'm a writer and I got my bathroom tiled in exchange for writing some marketing materials for contractor and helping get their brochures designed and printed)

3) Hold a barn-raising with friends - invite everyone you know round to your house, cook them a meal and then tell them the problem. Explain you need as many ideas as they can muster and possible contacts to helping you either get the money or get the job done. Don't necessarily ask them for the money, just their time and creative input. (I had a friend-of-friend-of-a-friend who was a mortgage broker arrange a whopping 'huge' mortgage with 'no forms to be filled' for a flat 'fee' of £400 when I really needed it and my back was up against the wall. Now I didn't go down that route in the end thanks to a fortuitous turn of events, but it's worth thinking about. All he wanted to know (and he told me this) was "yes" in answer to his question "can you afford it?")

4) Ask a very, very good friend or family member that has absolute trust in you to take out a loan for the £3,000 and then make sure you pay them back first when the house sells plus a generous bit more for helping you out of a spot (what about paying for cheap summer sun holiday for them next year?!). Again, make sure it's all in writing as a proposal - design a package of some kind and sell it to them. Insist on up holding the principle of mutuality - they must get something out of the deal. And you must pay the money back by a specified time come hell or high water.

5) Ask some of your friends/family for the money and offer them a whopping 10% interest each a month so they get something back on deal when you sell. Make sure you offer them everything in writing and make it a detailed proposal, not just a air waving offer.

6) Go to your nearest big housing development in progress and see if any of the workers there would be willing to "help you out with materials" such as carpet and perhaps a bathroom suite etc. You might have to sell something to get a small bit of cash together or ask a friend for loan.

7) Start puting up ads on freecycle for materials and see what comes back.

Being poor is no excuse not to go for your dreams. You just have to get there slightly more creatively.

By the way, Duncan Bannatyne of Dragon's Den fame used his credit cards and loans to the hilt when he first strated developing his nursing homes and there was a period when he was days away from being bankrupt. He just managed to pull it off and even he admits he was !!!! scared at that point but he held on. And as most successful people say, if you lose it all, learn from it and use the knowledge to make it all back again.

I'm not saying throw caution to wind and plunge in. Assess everything carefully, weigh the risks, make a decision and then have faith in yourself and your decision. If that decision is to sell the house now unfinished, throw yourself into doing it and don't look back. Go onto the next project and chalk this one up to experience.

pania

fantastic post steel. Just goes to show with a little imagination:T :T

nicola1982_2

Rob do you have any bank charges you can claim back that would help towards the end?

climbgirl

Robflh wrote: »

So to speak, I was living on credit and in a way, I have been for over twelve years. So, I should know what I am talking about.

I don't even know where to start with this and the whole of your last post where you talk about juggling credit cards and balance transferring to pay them all off.

This is a very, very dangerous house of cards as sooner or later you start to run out of good deals to switch to (especially if you're unemployed). One day you actually have to start paying back the debt, you can't transfer it forever and keep burying your head in the sand. You've been living off credit for 12 years as you say and you wonder why AMEX have cut you off?!?! My only question is why the hell they didn't do it sooner.

Martin and this site are a big fan of balance transfers and zero % deals - but only if they're used in order to lower interest on debt. Not to keep moving debt around in order to avoid paying it back.

I don't think you're really open to suggestions that will help you sort your financial predicament - I think you came here looking for ways to get more credit when AMEX cut you off, not for ways to solve the debt problem. I'm not going to post here anymore, I think the advice is going straight over the top of your head.

For other posters, I'd take any advice given by the OP with a very large grain of salt. The financial wheelings and dealings advocated are not a good way to deal with debt!

kathy206

Sorry Rob but I agree with climbgirl. I have read these posts with interest and empathy. You are very articulate, and you are obviously intelligent. When you have got through this (and I am sure you will) why not try retraining so you can go back to work. Good luck whatever you do.

Robflh

Hi chevalier
I said most people, not all people and I am not the one that original said that. Financial experts have been saying that for a few years now.

I have also herd of people that have thousands of pounds on credit cards and all of it is at 0%. They constantly move the money from one credit card to another, while they invest that money and get a good return on their investment.

I also know of other people that only use their credit card to make large purchases. When they need a new fridge freezer, they pay for it with their card and always pay off the balance over the next few months. They are then ready for the next time they need to use the card to bale them out.

However, you are not living beyond your means. You are using the card each month and paying off the balance at the end of each month. As I understand it because the CC Company will not make money from you on the interest side of it, they make you pay a membership fee each year. Unless when you applied for the card, you did not tell them that you would be paying the balance off each month.

Anyhow, I think even you would agree that you are one of the few and not one of the many.

Robflh

Hi owensmum75
Like others, you have missed the point. Unlike everyone else here, getting rid of the debt is not my primary objective it is my secondary objective. My primary objective is to build up a nest egg for when I retire. As a part of doing that, I will kill the debt.

Without knowing all the facts I cannot say if you did the right thing in selling the house or you jumped the gun.

Robflh

Hi Steel
What a superb post and it is only £2,000 to finish off the house, it could be less. The other £1,000 was to make sure I could meet my financial commitments until I have sold the house.

It is not just a card with the lowest APR that is important. When I go to my bank to make my credit card payments, I am regularly asked if I would like to see someone about taking out a loan, as a loan would have a lower APR.

That is great I say, so you can do me a loan with an interest rate that is lower the 4.9 %. They would reply, no we cannot do one as low as that. To which I would reply, then there is not much point in seeing anyone about a loan.

Most of my outstanding debt was balances that had been transfered from one card to another. A BT APR rate is nearly always lower then the lowest loan APR.


1) Take on a lodger - perhaps a Polish or Czek builder who charges less than most English builders yet whose work is good and has a good reputation - and offer them some form of free rent and bills in exchange for him buying the materials and doing the house. If you have a Polish or Czek community in your area you could put a wanted ad up in their local Polish supermarket. I already have two and do not have room for a third.

2) Trade your services or something of value for that of a good builder to come in and finish the job. They buy the materials etc you work off the money. (For example, I'm a writer and I got my bathroom tiled in exchange for writing some marketing materials for contractor and helping get their brochures designed and printed) Not sure that I have anything I could trade. In a way I have already done this, I looked at what I could do to earn some pocket money and to gradually increase that work until I was working for myself on a full time bases.

3) Hold a barn-raising with friends - invite everyone you know round to your house, cook them a meal and then tell them the problem. Explain you need as many ideas as they can muster and possible contacts to helping you either get the money or get the job done. Don't necessarily ask them for the money, just their time and creative input. (I had a friend-of-friend-of-a-friend who was a mortgage broker arrange a whopping 'huge' mortgage with 'no forms to be filled' for a flat 'fee' of £400 when I really needed it and my back was up against the wall. Now I didn't go down that route in the end thanks to a fortuitous turn of events, but it's worth thinking about. All he wanted to know (and he told me this) was "yes" in answer to his question "can you afford it?") Already done it but not the meal. I did not want to kill them.

4) Ask a very, very good friend or family member that has absolute trust in you to take out a loan for the £3,000 and then make sure you pay them back first when the house sells plus a generous bit more for helping you out of a spot (what about paying for cheap summer sun holiday for them next year?!). Again, make sure it's all in writing as a proposal - design a package of some kind and sell it to them. Insist on up holding the principle of mutuality - they must get something out of the deal. And you must pay the money back by a specified time come hell or high water. I have already asked the two people that could possible do that.

5) Ask some of your friends/family for the money and offer them a whopping 10% interest each a month so they get something back on deal when you sell. Make sure you offer them everything in writing and make it a detailed proposal, not just a air waving offer. I told them I would give them back £1,200 with in a year if they lent me £1,000. That would be a 20% return on their investment.

6) Go to your nearest big housing development in progress and see if any of the workers there would be willing to "help you out with materials" such as carpet and perhaps a bathroom suite etc. You might have to sell something to get a small bit of cash together or ask a friend for loan. Are you telling me to ask someone to steal a suite for me and pay them something for their trouble. I do not think I would be happy about doing that.

7) Start putting up ads on freecycle for materials and see what comes back. What and where is freecycle, that one is new to me.

Duncan Bannatyne took a huge risk, which paid off big time. If it had all gone wrong he would undoubtedly have picked himself up, dusted himself down, looked at what happened and why it went wrong. Ie learn from your mistakes so you are less likely to make them again.

Then as soon as he was able to do so he would have again taken a huge risk. For him, what he would win would be well worth the risk and that it is a calculated risk.

idiot_3

Is it just me that thinks it is really taking the biscuit to be property developing whilst on benefits but "too ill" to work??!! Are you sure you have not just become too comfortable getting handouts for 12 or however many years?