Loan to pay off credit cards?

AliceBanned

I am beyond getting upset about the level of my debt. I just don't see how I can get out of it. I have posted on here before. Maybe it is just a question of time but my two credit cards at higher percentages of interest are starting to get on top of me - between them I am currently paying around £110 per month in interest and an only make just over the minimum payment. From next month I will be able to make about £100 each over the minimum payment. It is so difficult. I am living fairly simply but my travel expenses are high, so I've decided from next month to cancel my season ticket, so at least my season ticket loan won't come out of my salary before I get my pay, and I can sue that £260 towards my debt. I can get the bus in to London to work, although it might be a nightmare, for a few months anyway.

I have £460 saved with a credit union, and a debt with them of around £1400, paying at £70 pm. I can't access the savings until I've paid off the debt. I have asked them for a further £200 this month to tide me over, otherwise I am withdrawing cash from credit cards. I know that's bad. I seem to have overspent when I moved house, and it is more expensive to live in the new place although much nicer and saves me 2 hours a day travelling so was the right decision but I knew that temporarily (or for about two years) it would be a hard slog, unless I can get balance transfers onto 0% which I can't. The question is, should i just try and borrow £3k from the credit union to pay off one of the cards. That would still be 12% interest. They might not even loan me the £200 as I have not heard back yet.

Alternatively I could pay off the credit union as I am doing, not borrow more and at least have access to the savings, to pay off my Halifax o/d which is costing me a lot. Halifax suggested i switched to a different current account, witha fee which charges less in overdraft charges. I seem to get in a mess with money whatever I do, but have not had a proper holiday for over 4 years and don't spend a lot, just have high outgoings and maybe expensive taste in clothes but I keep purchases to a minimum. I even get a cooked lunch at work, but I spend a lot in the supermarket for food sometimes. I think compared to a lot of people I live a frugal life though, but still can't pay off the debt. I think it is the debt that is making me poor. I earn just under £30000 and live near London, work in central London. Thanks.

happy_bunny_2

Maybe post a SOA:
http://www.stoozing.com/calculator/soa.php

Format for MSE.

Usually, taking out a loan to pay of cards is a bad idea.

Have you thought of asking the companies to close your cards to spending? Hard you may think, but takes away temptation to use them.

Good luck

HB

Sazzie23

You are right about the debt making you poor, but raising more debt will likely make you more poor - been there, done that.

Posting the SOA will not only let people help you, but also make you look at where your money does go.

I think you need to look at some drastic action before it gets out if hand, maybe a year of very, very frugal living to get the debts down massively or a second job, or something?

Skinnylatte

Can you move your cards to 0% interest? I was in the same boat as you, had my light bulb moment last June and stopped overspending. Since then I've shifted a lot of my debt to other low interest or no interest cards and have managed to pay an awful lot off. Last June I was paying £200 a month in interest, this month it will be around £10.
Starting a spending diary, and also a diary on here to track my progress has helped enormously.
Post your SOA and you'll get lots of great advice

AliceBanned

Many thanks. All good advice and much needed moral support.

I will post my SOA shortly and reply to your suggestions.:)

AliceBanned

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household.........
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1820
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1820
Monthly Expense Details
Mortgage................................ 374
Secured/HP loan repayments.............. 0
Rent.................................... 334
Management charge (leasehold property).. 100
Council tax............................. 90
Electricity............................. 22
Gas..................................... 35
Oil..................................... 0
Water rates............................. 12
Telephone (land line)................... 10
Mobile phone............................ 36
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 120
Clothing................................ 20
Petrol/diesel........................... 40
Road tax................................ 12
Car Insurance........................... 26
Car maintenance (including MOT)......... 10
Car parking............................. 0
Other travel............................ 260
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 7.6
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 13
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 12
Haircuts................................ 10
Entertainment........................... 60
Holiday................................. 40
Emergency fund.......................... 0
Gym..................................... 67
Total monthly expenses.................. 1737.6

Assets
Cash.................................... 460
House value (Gross)..................... 68000
Shares and bonds........................ 0
Car(s).................................. 1000
Other assets............................ 0
Total Assets............................ 69460

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 52930....(374)......5.69
Total secured & HP debts...... 52930.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Halifax mastercard.............3200......50........21.9
Barclaycard1...................1047......20........7.293
Barclaycard2...................2720......50........19.85
Total unsecured debts..........6967......120.......-

Monthly Budget Summary
Total monthly income.................... 1,820
Expenses (including HP & secured debts). 1,737.6
Available for debt repayments........... 82.4
Monthly UNsecured debt repayments....... 120
Amount short for making debt repayments. -37.6
Personal Balance Sheet Summary
Total assets (things you own)........... 69,460
Total HP & Secured debt................. -52,930
Total Unsecured debt.................... -6,967
Net Assets.............................. 9,563
Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

AliceBanned

PS my signature needs updating so the debts are not accurate. I am very close to accurate on the SOA but have rounded up numbers for speed.

I have not included the First Direct debt of £1800 on 0% credit card for now, but realise I should have as I am paying off the minimum on it. I may have to do the SOA again but don't think I've missed anything else out.

As you can see, apart from the gym and transport (I am going to get a refund for my train season ticket and take the bus/work from home more), there isn't much I can cut back on. The gym is important at the moment as I don't go out much. I also have high cholesterol and am on a 3-4 month programme to bring it down. Enjoying the exercise actually. I may freeze my gym membership for a while in the summer, or close it, especially if I have got my cholesterol down to a more acceptable level and am feeling fitter. I find the gym very important for my mental health though, so difficult to give it up and get unwell again mentally and physically. :cool:

AliceBanned

Skinnylatte wrote: »

Can you move your cards to 0% interest? I was in the same boat as you, had my light bulb moment last June and stopped overspending. Since then I've shifted a lot of my debt to other low interest or no interest cards and have managed to pay an awful lot off. Last June I was paying £200 a month in interest, this month it will be around £10.
Starting a spending diary, and also a diary on here to track my progress has helped enormously.
Post your SOA and you'll get lots of great advice

I have one 0% card but have been unable to get any more recently. So I am working hard to pay down what I can, until hopefully I can shift more onto 0% or low interest.

Thanks for your advice. You've done really well with repaying your debts!:)

AliceBanned

Sazzie23 wrote: »

You are right about the debt making you poor, but raising more debt will likely make you more poor - been there, done that.

Posting the SOA will not only let people help you, but also make you look at where your money does go.

I think you need to look at some drastic action before it gets out if hand, maybe a year of very, very frugal living to get the debts down massively or a second job, or something?

Thanks. Reality is really sinking in now, but I'm trying to stay positive. It is partly because I got on the property ladder. I am not spending any more on my flat or myself for several months, I've decided. Then I can review things again. I will probably remain very careful until the end of this year at least, and set up a proper plan. I think cutting up one of my cards would help as I have a habit of using them whilst paying them off. It just doesn't work! ie when i get paid I put a chunk in to pay them off, knowing that it will mean I need to use them for my everyday spending and bills etc.

AliceBanned

happy_bunny wrote: »

Maybe post a SOA:
http://www.stoozing.com/calculator/soa.php

Format for MSE.

Usually, taking out a loan to pay of cards is a bad idea.

Have you thought of asking the companies to close your cards to spending? Hard you may think, but takes away temptation to use them.

Good luck

HB

hmm no hadn't thought of that. Does this mean they are never re-opened? I could do that one by one. I am definitely not taking on any more debt, unless it is 0% balance transfer. The danger with the balance transfer cards is that it is easy to then spend on the other card, thinking there is more leeway. But the time then comes to pay off the 0% and I owe to much on it!

Sedge123

Whilst I agree that the gym can be important £67 does seen very steep. I live in an expensive area and our local leisure centre gym is about £40.