Paying CC without DMPs

National_Debtline

Hello there,

A DMP would only be a viable solution if you cannot meet the contractual minimum payments on your credit agreements. If you can meet the minimums then snowballing would be the general approach to take. It's important to differentiate between debt which is manageable and debt which is unmanageable. The vast majority of our callers have a significant change in their circumstances which forces them to look at one of the debt options - for example a loss of job, relationship breakdown, illness or retirement. Very few seek help simply because they've lived way beyond their means.

We do speak to a number of people that are keen to keep a good credit rating, some of whom simply go on to make matters worse for themselves by taking out further borrowing to pay off their existing debt. This creates the risk of increasing the amount outstanding and often comes to a head when the lenders refuse to lend further. I've spoken to people that have gone on to ignore the advice given only to call back a year or so later with a further £10,000 owing.

It can be incredibly difficult to know instinctively what to do, and I do hope that you spend some time researching your options. What could be incredibly useful is to post up your statement of account on here - or to go through one with one of the debt charities. Ultimately, only you can decide which route is best for you - but do ensure that you make your decisions as objectively as possible.

You may find it useful to have a play around with our online advice service, www.mymoneysteps.org

Very best wishes,

David @ National Debtline.

..ukeuro

I started a DMP in March 2009, and whilst I am nearing the end of it now, I am wondering if I made the right decision, cos it seems my credit rating is going to be affected until 2021. Not that I'm wanting more credit, but its a factor to consider. Interest was frozen on some accounts, but on others I still paid charges and interest and some balances have seemed to take forever and a day to go down. I don't know how well informed I was in 2009. At the time, I was just depressed, stressed, and couldn't seen an end to owing money. I don't regret the DMP, but I don't think I was fully aware of the full implications, which I take responsibility for. All the best!!!

longtermplanner

I assume your credit record is reasonable at the moment, or you wouldn't be worried about trashing it.

changeforbetter wrote: »

I keep bouncing between the pros and cons for both - and without any action am stuck paying smaller amounts off my debts each month solely because I can, when I know, perhaps, I should sort it a different way.

That makes paying off your debts without a DMP sound like a passive approach. I (and many people here I think) would argue that it isn't, because if your credit record is reasonable you should be able to plan to reduce the interest on your debts, preferably by getting as much as possible onto 0% cards.

If at the extreme all your debt is on 0% cards, then you have all the advantages of a DMP with none of the disadvantages!

The Debt Camel site looks at your dilemma here: http://debtcamel.co.uk/hard-choices/skinny-snowball-vs-comfy-dmp/ and makes the good point that a lot depends on how realistic your budget is. If the reason you aren't making progress on clearing your debts is because something unexpected seems to happen most months, then you need to improve your budgetting. And if your improved budget means that you can't afford the minimums, then a DMP is the answer.

changeforbetter

Thank you for the great helpful replies all above.

On the issue of 0% cards - I've already tried that and been declined for recent applications. I doubt I would get any new credit with my current set of cards almost maxed out. I will keep looking into that sort of option though, as I agree it could help.