Help - credit card interest question

carl_t

Hi All
My partner is in a little bit of trouble with her finances, she has a number of credit cards, due to debts in the past, and also she is a mature student doing a medical bursary at a hospital!
She has a child also!
She is really struggling to pay these off now and getting into more debt each month making the minimum payments etc.


A friend told me that it is possible to speak to the banks and basically they knock the interest off so you are only paying the money you owe back rather than the interest also, is this true, and is it possible ?

lynz68

It is not as straightforward as that or there would be no point in interest rates in the first place. She can certainly ask for help and they may give her a short period say 6 months but this will be marked as an arrangement to pay and will have an affect on her credit rating for up to 6 yrs.

If she is really struggling she may be best talking to one of the free debt advisory companies such as Stepchange.

grumbler

carl_t wrote: »

... getting into more debt each month making the minimum payments ....

How come? At least she has to stop using the cards in the first place, in which case the debt has to stop rising.

molerat

grumbler wrote: »

How come? At least she has to stop using the cards in the first place, in which case the debt has to stop rising.

Are there still some old style cards out there where the minimum does not always cover the charges ?

YorkshireBoy

molerat wrote: »

Are there still some old style cards out there where the minimum does not always cover the charges ?

No. Legislation/regulation prevents that now, and has done for a number of years.


However, the payment only needs to (at least) cover the interest on a particular month's statement...not the interest still accruing (from statement date to payment due date, which could be 3 weeks or more away) because you're not settling in full each month.


So it is entirely feasible that the debt could be increasing slightly, and more so if you're still spending on it!


I took the "getting into more debt each month making the minimum payments etc" comment to mean they were borrowing from elsewhere (perhaps via an overdraft?) to make the payments on the credit cards, rather than continuing to spend on the cards.

CLAPTON

carl_t wrote: »

Hi All
My partner is in a little bit of trouble with her finances, she has a number of credit cards, due to debts in the past, and also she is a mature student doing a medical bursary at a hospital!
She has a child also!
She is really struggling to pay these off now and getting into more debt each month making the minimum payments etc.


A friend told me that it is possible to speak to the banks and basically they knock the interest off so you are only paying the money you owe back rather than the interest also, is this true, and is it possible ?

it's a bad idea and may affect her credit rating for 6 years

can't her boyfriend help at all?

misspickle_2

Have they reached their limit? Has she now stopped spending on them?
Is there anyone who would take out a loan for her at low interest so she could consolidate and just pay the person monthly by direct debit?
Depends how high the debt is I suppose. Are we talking a few thousand or much more? Its worth asking a family member.

Candyapple

CLAPTON wrote: »

can't her boyfriend help at all?

misspickle wrote: »

Is there anyone who would take out a loan for her at low interest so she could consolidate and just pay the person monthly by direct debit?
Depends how high the debt is I suppose. Are we talking a few thousand or much more? Its worth asking a family member.

It shouldn’t be the first port of call to automatically ask for the partner/friends/parents to step in and help financially. What happens if the partner etc. clears the debt either by using their savings or taking out a loan and then the relationship breaks down and the debtor refuses to make repayments?

Also, the debtor in question will not learn how to manage their money responsibly if someone is there to bail them out, making the same mistakes continuously.

You only have to look at the ‘Loans’ board to read numerous horror stories of where this type of arrangement has gone pear-shaped despite the debtor’s intention of paying the money back regardless of their relationship to the person who helped them out.

Better to tackle the debt from the root and look at what caused it and what can be done. Second/part time job? Overtime at current job? Monthly budget drawn up and cut back on unnecessary spending? If all else fails, as another poster mentioned, it’s best to talk to a debt advisory company for further options.

misspickle_2

Candyapple wrote: »

It shouldn’t be the first port of call to automatically ask for the partner/friends/parents to step in and help financially. What happens if the partner etc. clears the debt either by using their savings or taking out a loan and then the relationship breaks down and the debtor refuses to make repayments?

Also, the debtor in question will not learn how to manage their money responsibly if someone is there to bail them out, making the same mistakes continuously.

You only have to look at the ‘Loans’ board to read numerous horror stories of where this type of arrangement has gone pear-shaped despite the debtor’s intention of paying the money back regardless of their relationship to the person who helped them out.

Better to tackle the debt from the root and look at what caused it and what can be done. Second/part time job? Overtime at current job? Monthly budget drawn up and cut back on unnecessary spending? If all else fails, as another poster mentioned, it’s best to talk to a debt advisory company for further options.

Yeah I agree with what you say. Its very risky for the loved one taking on the loan and not ideal. Plus you put immense pressure on the person your asking.
It does work sometimes though. It depends on the people.
My dad took out a loan for me for a cheap car. He's done this twice actually but I never once missed a payment. It is all paid back with interest.
Depends on the circumstances.
But yeah I get your point.

CLAPTON

Candyapple wrote: »

It shouldn’t be the first port of call to automatically ask for the partner/friends/parents to step in and help financially. What happens if the partner etc. clears the debt either by using their savings or taking out a loan and then the relationship breaks down and the debtor refuses to make repayments?

Also, the debtor in question will not learn how to manage their money responsibly if someone is there to bail them out, making the same mistakes continuously.

You only have to look at the ‘Loans’ board to read numerous horror stories of where this type of arrangement has gone pear-shaped despite the debtor’s intention of paying the money back regardless of their relationship to the person who helped them out.

Better to tackle the debt from the root and look at what caused it and what can be done. Second/part time job? Overtime at current job? Monthly budget drawn up and cut back on unnecessary spending? If all else fails, as another poster mentioned, it’s best to talk to a debt advisory company for further options.

for a casual bf/gf that is true, for a 'partner' totally absurd.

depending always on what is meant by 'partner'

misspickle_2

CLAPTON wrote: »

for a casual bf/gf that is true, for a 'partner' totally absurd.

depending always on what is meant by 'partner'

Its always a gamble though.
If its small amounts and the person is well off enough to chalk it up to experience if they don't get paid back then fair enough.
But if its emotional blackmail and manipulating and putting pressure on family and friends then its a whole different ball game. Especially if they cannot really afford to help.
Its down to the individual people and their relationships I suppose.
My dad offered and knew damn well I would pay him back.
Maybe ops family are different. Who knows?