Help please... Can get 0% credit card to shift debt

gemmylouise

Help...

My three credit cards have started to pay massive interest costs of which I am struggling to keep on top of... Ideally I need to switch my debt to 0% but I have been refused credit cards... What can I do now? Should I consider a debt management plan or will this risk my chances of changing my mortgage in a couple of years.......? Really don't know what to do, fed up of worrying about debt....

Tixy

Yes a debt management plan will almost certainly make it difficult to get a mortgage in a couple of years.

Have you worked out how much you can afford to put to these debts a month? Are you able to meet the minimum payments without reusing the cards at all? Can you afford more than the minimums?

What are the balances, limits and interest rates on the 3 cards?
Have you compared the interest rates on all 3 cards? and do they differ much?

If you are thinking about a mortgage are you saving for a deposit? if so then because the interest rates you are paying will be more than your savings could earn it would be better to put all monies towards paying off the debts first.

gemmylouise

Thank you for the reply.... It's a relief...

I already have a mortgage but I was hoping to move house and increase my mortgage in a few years.

I have had a look at a debt management plan because I can only just meet the minimum payments.

I have 3 credit cards. £9k, £5k and £2k. The minimum payments used to total around £150 and now it's costing me over £500. I used to be on 0% and now the rates have rocketed! On the one card I am paying £280 a month a only actually paying about £80 off the debt. I am frustrated at having to pay so much interest.

I seem to be stuck though because I am being refused any more credit.... What do you suggest I do?

Tixy

If you cannot get 0% deals then its a case of working out how you can minimise the interest.

So paying off the card with the highest APR first. If the cards are not maxed you could see if you could move some of your debt around to get more at the cheapest rate, or even see if any may offer you a balance transfer offer between the cards.

Failing that then can you look at your budget to see if you can increase your monthly payments? perhaps try running the figures through a snowball calculator (link below) to see how long it will take to repay them, and depending what that shows can you look to see if you can increase income/sell anything / reduce outgoings further etc.

http://www.whatsthecost.com/snowball.aspx

I don't suppose you have any other old credit card accounts open that have no balance? (that you have used in the past and done balance transfers from). If so you could ask them if they will offer you any promo rates for balance transfers.

gemmylouise

Hi tixy,

Thank you for replying again, you have made me feel much better.

I did have some extra room on one card but my lender reduced my credit limit so they are nearly all maxed out.

I think I will have to try looking at my household budget and seeing what I can reduce but I don't think I can do much more.

I'm 30 this year and want to clear debt to start a family. I might consider selling my car £4k to relieve some debt.

I have got to the point where I am worried to look at all my out goings incase I can't meet them. I think I need to bite the bull by the horns and make a budget ... Thanks

gemmylouise

I closed my old credit cards with no balance left, then they wrote to me and offered a 0% balance transfer.... When I rang they said it was too late now because they had closed it!

Tixy

When you come to do the budget this calculator is useful - http://www.stoozing.com/calculator/soa.php

I know it can be scary to bite the bullet and write it all down - but they do say knowledge is power! and at least once you see if you can start making plans.

gemmylouise

Guess I am going to have to keep paying the interest until I can get approved for a 0% deal.... Wish I hadn't got into this mess!