Help / advice please on which cards to reduce / pay off first

Trigger1971

Hi everyone. It's my first post here so first of all hello and secondly please go easy on me

I've recently decided to sort a few things in my life (bit of a long story so I shan't go into it but basically I've had a wake up call!) which has meant that I've decided to make a few positive changes and one of them concerns money which as you'll shortly see (credit card wise) is a bit of a mess!!

I've got a good few credit cards (yet very few good credit cards!!) all of which I manage to make payments to each month and I'd like to start to concentrating on clearing them. Trouble is they all have different rates, outstanding balances etc and I'm really not too sure where to start.

Bellow I've listed the card provider, the APR, the outstanding balance, the minimum payment that they currently want and what I actually pay. Where the amount that I pay is higher than the minimum payment then that's done by direct debit that I've set up. I'm also in a position now to pay off a further £500 a month (to go wherever is deemed best) and have a lump sum of £1500 (that's my last 3 months £500 / month savings so I know I can do it) that I could use straight away. I should also point out that the Barclaycard has a rather high limit of £14900 and they have just sent me a letter offering 0% for on transfers until the 1st of September with a 1.9% fee but again I really don't know if I should use this. One last thing is that a couple of them have fixed interest rates after I declined their increase.

Anyway, onto the cold hard truth. Here we go:

A.E 26.9 £2043 £52 £52

Barclaycard 22.9 £8925 £175 £300

Capital One 17.5 £1908 £45 £45

Halifax 28.5 £1319 £29 £300

MBNA 18.9 (fixed) £3100 (aprox, can't see it on statement) £97 £97

Natwest 19.2 £5357 £120 £120

Virgin 21.9 (fixed) £6692 £221 £221

Pretty grim eh. But, I'm determined to at least start making a dent in them. As you can see I've nearly paid off the Halifax one which means that soon I'll have £800 in total a month to use to start paying them off.

If you've got this far then thanks for taking the time to read my post and please feel free to give me some advice as to where I should start with paying these off, I'd really appreciate it

grumbler

I think it's pretty obvious that you have to keep making minimum payments and direct all extra money to the card(s) with the highest interest rate first.
That said, psychologically it can be easier to concentrate on paying the smallest balances.

And don't ignore balance transfer offers that many CC companies often have for existing customers: Credit Card Shuffle

mum2one

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If you don't do the Balance transfer - this is how I would hit them...


1st - Halifax 28.5 £1319 £29

2nd - A.E 26.9 £2043 £52

3rd - Barclaycard 22.9 £8925 £175

4th - Virgin 21.9 (fixed) £6692 £221 £221

5th - Natwest 19.2 £5357 £120 £120

6th - MBNA 18.9 (fixed) £3100 (aprox, can't see it on statement) £97 £97

7th Capital One 17.5 £1908 £45 £45

Currently paying off £1135 per month

You say have £1500 ready to go, - and extra £500 per month. With the £1500 i would clear the halifax, and put any remainder off the next highest the A.E card.

from there - using the original £1135 and £500 extra this is how I would go..


- A.E 26.9 £2043 £52 £977

- Barclaycard 22.9 £8925 £175 new payment £175

- Virgin 21.9 (fixed) £6692 £221 £221

- Natwest 19.2 £5357 £120 £120

- MBNA 18.9 (fixed) £3100 (aprox, can't see it on statement) £97 £97

Capital One 17.5 £1908 £45 £45

In 2 months time your have A.E paid off, then add this payment to the £175 from Barclaycard - that make it £1152 - even with interest you could get this cleared in 10 months, then go down the list just adding the extra in.

-hope that helps xx

justcat

I recommend using http://www.whatsthecost.com/snowball.aspx. It's a snowball calculator.

Basically you put in all the info you have given above, and it tells you what to pay to each debt to clear it the most cost effectively. Either that or you can set it to get rid of a debt at a time so that you can close cards down and feel better about getting rid of debt!

Trigger1971

justcat wrote: »

I recommend using (I've had to delete the site as it won't let me post / quote it). It's a snowball calculator.

Basically you put in all the info you have given above, and it tells you what to pay to each debt to clear it the most cost effectively. Either that or you can set it to get rid of a debt at a time so that you can close cards down and feel better about getting rid of debt!

Thanks that sounds good and I'll certainly take a look at it .

Trigger1971

mum2one wrote: »

---
If you don't do the Balance transfer - this is how I would hit them...


1st - Halifax 28.5 £1319 £29

2nd - A.E 26.9 £2043 £52

3rd - Barclaycard 22.9 £8925 £175

4th - Virgin 21.9 (fixed) £6692 £221 £221

5th - Natwest 19.2 £5357 £120 £120

6th - MBNA 18.9 (fixed) £3100 (aprox, can't see it on statement) £97 £97

7th Capital One 17.5 £1908 £45 £45

Currently paying off £1135 per month

You say have £1500 ready to go, - and extra £500 per month. With the £1500 i would clear the halifax, and put any remainder off the next highest the A.E card.

from there - using the original £1135 and £500 extra this is how I would go..


- A.E 26.9 £2043 £52 £977

- Barclaycard 22.9 £8925 £175 new payment £175

- Virgin 21.9 (fixed) £6692 £221 £221

- Natwest 19.2 £5357 £120 £120

- MBNA 18.9 (fixed) £3100 (aprox, can't see it on statement) £97 £97

Capital One 17.5 £1908 £45 £45

In 2 months time your have A.E paid off, then add this payment to the £175 from Barclaycard - that make it £1152 - even with interest you could get this cleared in 10 months, then go down the list just adding the extra in.

-hope that helps xx

That's great. Now that you've laid it out for me in that way it all makes sense to me (couldn't see the woods for the trees etc!) and I'm actually looking forward to calling up Halifax tomorrow and saying goodbye to them. When I do should I close the account or seeing as it has quite a high limit ask if they have any deals on transfers and put some of the other (if at a higher APR than what they offer me) debt their way?
Also at the beginning of your post you said "if you don't do the balance transfer". In your opinion is that something that I should be doing / looking at and if so with which debts?
Sorry for all the questions but if I'm honest I'm rather new to being responsible (head in the sand and all that and it's all my own doing so there's no point in denying it) with my cards. I'm paying the price now but I'm determined to do it!!

grumbler

Trigger1971 wrote: »

...you said "if you don't do the balance transfer". In your opinion is that something that I should be doing / looking at and if so with which debts?

• Existing custs credit card deals

I have already posted the same link above.

The discussion thread: Unoffical Existing Customer Balance Transfers

Trigger1971

Thanks for that Grumbler.

Took a quick look at it a few minutes ago and I can see the sense in doing that and then getting on with the paying off of the debts

Trigger1971

Ok, so I've made a couple of calls and here's what I've been offered.

Halifax have said I can move balances across with a 3% fee and they'll then give me 0% on them for 9 months. No increase in my limit which is currently at £6150.

Barclays have offered me 0% with a 1.9% fee until the 1st of September or 6.9% for life with a 2.9% fee. Again no increase in the limit which is currently £14900

If I were to be able to get a total of £3500 cash (I have some in an ISA that I could use) and pay off my Halifax using £1000 (my original figures hadn't taken into account my latest payment) that would leave me with their offer (0% for 9 months) available with £6150 of credit. I could then pay the other £2500 off my Barclaycard and shift what's left on it (aprox £6150) over to the Halifax 0%, concentrate on paying that off in the 9 months and shift all other ballances over to the Barclaycard at the 6.9% fee. I'm guessing to pay off the Halifax card in 9 months I'd have to pay off £683 a month (£683 x 9 being £6147) meaning I then put the other £952 from the extra money I'm committing to this (£500 a month) and the money from my transferred payments into paying off the 6.9% Barclaycard?

Have I got all that right (I feel I'm missing something!!)? Certainly seems to be way way cheaper than what I'm doing at the moment or than by not doing the transfer.

mum2one

Trigger1971 wrote: »

That's great. Now that you've laid it out for me in that way it all makes sense to me (couldn't see the woods for the trees etc!) and I'm actually looking forward to calling up Halifax tomorrow and saying goodbye to them. When I do should I close the account or seeing as it has quite a high limit ask if they have any deals on transfers and put some of the other (if at a higher APR than what they offer me) debt their way?
Also at the beginning of your post you said "if you don't do the balance transfer". In your opinion is that something that I should be doing / looking at and if so with which debts?
Sorry for all the questions but if I'm honest I'm rather new to being responsible (head in the sand and all that and it's all my own doing so there's no point in denying it) with my cards. I'm paying the price now but I'm determined to do it!!

As for the halifax, I would keep the card open, but not use, - even if you go as far as putting it in a freezer bag, then in a margarine tub and freezing, it... then if you do need to spend you have to go through a farce to get to it, just pre lighbulb moment, (done it twice) cleared cards then respent on it.. hence discipline.

Its definatly worth asking if they balance transfer, and it would take some pressure off the higher APRs.

The snowball link you've been given is brilliant, - it be more accurate than my figures, - as it does it to the best for your - if you go via APR - pay off quicker than going by balances. Sometimes it could be 8 months difference, between paying APR or highest balance.

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I always think with balance transfer you need to be disciplined to not to use the cards that you have free'd up, (different for emergency) but some people use a new outfit or fancy a new iphone, or new top of the range laptop..

xx

mum2one

I've gone via the snowball link, - based on your repayment £1135 adding in the extra £500. I've put the minimum payments on what you've listed as the min payment
Taken into account that the £1500 you have put by has taken Halifax out of the equation.......

Your debt free date would be Dec 2015

xx