Advice needed.....

thecassman86

Timetochange89 wrote: »

My overdraft is about £60 should I be concentrating more on the credit card than the overdraft although I'm using the overdraft to pay the credit card - I'm cutting down on my spending so hopefully eventually it will balance out

We really need the APR values of the credit card and overdraft to be able to answer that question.

Timetochange89

thecassman86 wrote: »

We really need the APR values of the credit card and overdraft to be able to answer that question.

I know I'm always paying £60 a month on my overdraft my apr on the credit card says 18.9%

thecassman86

OK, remarkably £4000 at 18.9% APR - your CC is also costing you £60/month interest!!

So, you're currently paying £120 every month and your debt isn't going down!!

Just to give you an idea of how much interest adds up...

At £100/month and 18.9% APR your £4000 will take 372 months to pay up (i'm not joking!!!) and will cost you (on top of the £4k) £6,173.97 extra in interest!!! So, you'll be paid up in March 2045.

As you can see; credit cards aren't all they're cracked up to be.

My advice is to find as much as you can to pay on these debts; £100 per month on your CC is simply not enough. Plough as much as you can into them as possible, a few hundred per month... Then, try to get a 0% card. Even if it's for some of the debt you can transfer it across (That's 0% Balance Transfer for as long as possible)....

Timetochange89

thecassman86 wrote: »

OK, remarkably £4000 at 18.9% APR - your CC is also costing you £60/month interest!!

So, you're currently paying £120 every month and your debt isn't going down!!

Just to give you an idea of how much interest adds up...

At £100/month and 18.9% APR your £4000 will take 372 months to pay up (i'm not joking!!!) and will cost you (on top of the £4k) £6,173.97 extra in interest!!! So, you'll be paid up in March 2045.

As you can see; credit cards aren't all they're cracked up to be.

My advice is to find as much as you can to pay on these debts; £100 per month on your CC is simply not enough. Plough as much as you can into them as possible, a few hundred per month... Then, try to get a 0% card. Even if it's for some of the debt you can transfer it across (That's 0% Balance Transfer for as long as possible)....

That doesn't sound good, so I need to just save what every I can and pay more that the minimum each month?
At the minute I can't ever see myself out of this

GingerFurball_2

What bank are you with that a £1500 overdraft is costing you £60 a month to service?

Timetochange89

GingerFurball wrote: »

What bank are you with that a £1500 overdraft is costing you £60 a month to service?

I have a nationwide current account ?

FinanciallyUnsavvy

Hi there

Your debts are similar to mine. At the start of the year I had just over £4000 on credit card and an overdraft of £1500.

I've had the overdraft since my first year of uni; I've been in full time employment for 4 years now and until recently, as you said, it's a vicious cycle of money going in, OD going down a bit, end of the month, OD being maxed out again.

My account with the OD is also the account my wages get paid into and the account I use day-to-day. I've considered changing to another bank account, but aside from seeing a positive number on my bank statement every day, I decided it wouldn't really make much difference to me. Credit cards that let you move your OD to them are hard to come by (they're called super balance transfer cards, I believe), but if you can find one, then you could consider it to save some interest.

You are in a good situation to fix this, and fast. You still live at home, and although you don't have a large wage, you have plenty of disposable income. You're obviously spending more than your fixed outgoings you've highlighted above, so you need to sit down and be strict with yourself; look at past bank statements, find out EXACTLY where the money is going. Your car/home/phone totals to £235, so everything after that is free for debt, and disposable income. Personally - I'd be strict with yourself for a couple of months. Cut back on some luxuries. Even if you give yourself £100 a month for entertainment (which is a lot more than most people have when they're battling the debt monster!), you still have £465 left to throw at your debt. You could have your OD cleared totally in less than 5 months, then you can have the CC cleared in another 8/9 months after that.

What I would strongly urge you to do though is try and get a 0% deal for your credit card. There are a lot out there, and even if you can't get one for the full amount, any amount you can transfer is going to save a good deal of interest.

Good luck, you can do it. It's a bit overwhelming at first, but honestly, working out a true budget is the key. Be brutally honest with yourself. Work out what you spend, what you can live without, what you can't live without. Budget for EVERYTHING. I'd highly recommend looking up some software called "You Need A Budget" - or at least watching their budgeting tutorial videos and reading their advice on their website. I use this; it basically teaches you to give every penny a job. It's essentially a modernised version of envelope-budgeting (i.e. everything you spend is separated into categories). It's helped me so much. Before Christmas I was frequently having to use the credit card just to make ends meet by the end of the month, just because I wasn't aware of where my money was going. Now I know exactly how much I'm spending, and how much I have to spend on what, I always have money left at the end of the month - as well as having an extra £150 to throw at my debt than before.

Well.. sorry for rambling on quite so much. I hope you find this somewhat helpful though!

thecassman86

Timetochange89 wrote: »

That doesn't sound good, so I need to just save what every I can and pay more that the minimum each month?
At the minute I can't ever see myself out of this

Yes, the minimum payments on any form of credit always mean you end up paying obscene amounts of interest... That's where the banks make their money.

You have to be strict and committed. Literally everything you can throw at them you need to do that. I'd try and get a 0% Balance Transfer CC... Then transfer your current CC onto the new one and CLOSE YOUR OLD ONE!

FinanciallyUnsavvy has made lots of good points in their post too.

You can do this.

FinanciallyUnsavvy

Timetochange89 wrote: »

That doesn't sound good, so I need to just save what every I can and pay more that the minimum each month?
At the minute I can't ever see myself out of this

You CAN do it.

I felt the same way just a few months ago. You've taken the right step by coming here and admitting you need to sort this out before it gets any worse.

I live on my own, so have rent and bills to pay. After non-negotiable monthly outgoings, I'm left with roughly £380, so a bit less than yours.

Look at my signature - I've managed to pay off over £800 in less than 3 months.

I NEVER thought I'd be able to do it, but I am doing it, and you know what, once you get past the initial feeling of being stuck in a big black hole... it really isn't that hard. It just takes a bit of determination.

jackieblack

Timetochange89 wrote: »

When it's put like that it all doesn't seem that much ? Yes the £100 for the credit card is the min. I'll give you an example, so this month current account overdraft is £1500 my wages £800 so after that my overdraft is £700 and it seems to just go in a circle every month? Hope that kind of makes sense!

So clearly you're spending everything you earn and ending up back where you started.

You need to take a proper (accurate) look at where the money's going. then you need to get a grip of your finances and start making firm plans to repay what you owe.
You'll be so much better off once you've achieved this. Short term pain for long term gain!