Taking out a credit card while on a DMP

Clairebear36_2

Hi everyone,

Myself and my husband have a DMP with Payplan and have been paying it for the last year and a half. Apart from a few initial glitches, it has been going very well. We have just had an annual review and managed to increase our monthly payment but at our current rate it will still take us about 4 years to clear the debt.

We are desperate to move house to a nicer area, especially as our kids are heading towards secondary school age. Ideally we would love to move as soon as our debt is cleared but realise that we might have problems because our credit ratings will be badly affected.

So I wondered if it would be a good idea to take out a credit card just now - purely for the use of purchasing petrol and food each month and clear the full balance each month. We would ensure that the credit limit would be really low so we couldnt run up any more debt.

Would we be allowed to do this and would it help with our credit rating? I know we would be restricted with who would actually give us a card anyway.

sourcrates

A DMP is an unregulated agreement between you and your creditors, you are free to apply for a credit card should you wish, though I doubt you would get one seen as you probably have defaults on your credit file, and they will be there for 6 yrs, if you did get one and pay it off every month, it would help with your credit rating, but not significantly.

poppasmurf_bewdley

You're still in your DMP and talking about moving to a nicer area and getting a credit card. In other words, you're still in it up to your neck but you want to take on more debt.

Sorry to be blunt, but wait until you are clear of your current debts before taking on any more.

marliepanda

Taking on more credit during a DMP may cause it to be cancelled.

Yes you say you will only use it to buildup your credit rating, but you have shown you were not good at handling credit previously.

So don't do it, basically.

FireWyrm

With respect...did you have credit cards last time and if so...how did that work out for you? By the fact that you are in a DMP, you have already demonstrated that you were, at best, a little reckless with your money, or you wouldnt be in this mess. I would think twice if I were you, or there is a very real chance you will end up right back where you started, just with twice as much debt as before.

lynz68

I believe it will breach the terms of your DMP to take on further credit.

Apart from that I doubt you would get one anyway as there are bound to be fairly recent defaults on your credit record as you have only been in your DMP for approx 18mths.

heatherks

as previous posts have said if you are on a DMP through any company you are not supposed to be in a position to take on any more credit ..i was told it would cancel out my agreement

..either that pay extortionate % rates on one that lends to those on DMP / poor credit history

Sazzie23

heatherks wrote: »

as previous posts have said if you are on a DMP through any company you are not supposed to be in a position to take on any more credit ..i was told it would cancel out my agreement

..either that pay extortionate % rates on one that lends to those on DMP / poor credit history

Stepchange make it quite clear that you must agree not to take on further credit. I'm not sure about Payplan. Whilst it seems harsh, I agree with other OP's likely to run into trouble with it anyway.

I think the rebuilding of credit depends more on what defaults you get issued, and when they are issued as they are 6 years from date of issue.

antonic

Sazzie23 wrote: »

Stepchange make it quite clear that you must agree not to take on further credit. I'm not sure about Payplan. Whilst it seems harsh, I agree with other OP's likely to run into trouble with it anyway.

I think the rebuilding of credit depends more on what defaults you get issued, and when they are issued as they are 6 years from date of issue.

Payplan are the same.

eyeopener2

I'd wait until you have a year or less to go. Your children will be better off with parents who have no money worries than going to a (maybe) marginally better school with mum n dad still in hock to the banks.

Kate_fixing_it

I'd echo what others have said. Don't do it. It's far too easy to have a card for xyz but then just not quite pay it one month, then the next and before you know it you're up to your neck again.

As things stand it seems like your situation is fairly stable. I'd not want to rock the boat.

As for the school, again I'd be wary. Ratings go up and down all the time. Schools are judged on exam results and the show they put on for the day the inspectors call. If you can support your children in their education there's absolutely no reason they won't excel and with an internet connection a world of information is at their fingertips. The school my teens attend was mediocre when they started, both put in the work with support from us and both are looking at excellent grades at GCSE. They ask for help from teachers and it has always been provided. In the last 4 years the OFSTED rating has hugely improved. I think we focus far too much on the school and forget our children are individuals and just need the right guidance. YOU can give them this without it costing you a penny or causing the stress and upset of a house move and potential further debt.

Kate x