Offering Xp in the £ on CC that isn't bad debt

jammy_basturd

My point was that if I was to pay off a lump sum, I'd immediately cut my credit limit down to try and improve my credit rating by minimising the amount of credit open to me.

Which then leaves nothing available for the unexpected/unwanted.

grumbler

jammy_basturd wrote: »

My point was that if I was to pay off a lump sum, I'd immediately cut my credit limit down to try and improve my credit rating by minimising the amount of credit open to me.

Sometimes this can have quite the opposite effect.
What figures are we talking about in terms of total credit available / income?

And regardless, paying off and keeping the limit cannot be worse than not paying of and keeping the limit.

MSE article: Repay Debts or Save?

jammy_basturd

Credit cards are just about 10k. But have other debts too which increase that credit to just over double. Income is about 30k.

I take your point about paying off and keeping the limit!

I think I'm just getting a bit frustrated. Almost seems that if I was only slightly worse off I'd have much better options available to me.

CLAPTON

jammy_basturd wrote: »

My point was that if I was to pay off a lump sum, I'd immediately cut my credit limit down to try and improve my credit rating by minimising the amount of credit open to me.

Which then leaves nothing available for the unexpected/unwanted.

that would be a rather foolish thing to do.

far better to pay the balances down and
-save the interest
-make yourself a more attractive proposition for BT offers
(reducing your credit limits won't make you a more attractive proposition but reducing your debt will)


however, if you are not disciplined enough to manage this situation then that's another matter.

you may find it beneficial to post on the debt free wannabe board and get help in reducing spending etc.

jammy_basturd

I think you're right Clapton, for all the best intentions I get incredibly frustrated with the chain and ball of debt around my leg when I have little/no money but during the good/OK months I'm happy just paying the usual amounts!

Off to the debt free wannabe forum I go!

AliceBanned

You seem bothered that other people default and then write off 40% of their debt. I think this is avoiding the issue and agree the DFW forum would be able to help you.

Writing off some of the debt may seem like the easy option but in reality you need to look at your income and outgoings in detail to work out why you are in this situation and how you can get out of it. Finding a solution to your existing debt and repayments would help your credit rating far more than going into debt management plan or having debt written off, which would take six years to be removed from your credit file.

I am in a similar position and I know it's hard - seems like you are getting nowhere if you can only just about pay the minimum repayments or a bit more, and the interest is high. If I had a windfall I would pay off as much of the debt with it as I could, and hopefully this would give me access to cheaper credit if I needed it in an emergency, but ideally I would like to no longer need credit, am tired of paying so much interest and burying my head in the sand! It does require a change of attitude and it's not easy if you have had habits of overspending and/or not living by a budget. The DFW thread gives some support and practical advice.