Please Help. Young and In Debt!

rosebuddd

I'm a 21 year old, I have a part time job working 20 hours a week as a sales assistant and I have accumulated a lot of debt. Im really scared and dont know what to do? Its just crept up on me and I've tried to forget about it but now its hit me and I need advice.
Here is my debt...

• £500 Credit Card Debt
• £900 I owe my sister
• £150 I owe my mum and dad
• £170 on store card
• £300 into my overdraft

The £500 I have on a credit card is coming close to the end of the 0% fee, it runs out in October, so I was thinking on doing a balance transfer BUT, the £500 I have on this card is already ANOTHER balance transfer from another credit card, so would this affect them accepting me and my credit rating?

Does anyone have any tips on how to clear debt, any advice is welcome? Im so scared with me only being young that my credit rating will be terrible and will hinder me getting things like contracts and mortgages.

I always pay off the minimum payment on my credit card and I used to pay off the store card in full every month but the past couple of months I couldn't afford it, so on my store card I paid the minimum instead of in full and also went over the credit limit, leaving me with a £12 overlimit fee. Plus my credit card still has £500 left to pay because over the 16 months I have just been paying the minimum instead of more. Does this all affect my credit score?

I did the credit checker and it said that I was 90% to get a new 36 month balance transfer card, but I don't know if with all these other things taken into account I'd get it?

SORRY FOR THE LONG POST BUT NICE ADVICE WOULD BE APPRECIATED. I need reassuring I'll get it shifted

bsms1147

Hi rosebuddd, welcome to the site.

Acknowledging your position is a good first step. In the grand scheme of things your debts are not massive, and I'm sure you can get this sorted. The fact you have rolled over one debt onto a balance transfer card and are now close to needing to transfer that over suggests you may not have a balanced budget.

One way which people may be able to help is to analyse your budget, to see how you can pay the debt down.Post a statement of affairs

Don't worry about your credit rating at the moment. It sounds like you have been doing the right in thing in paying off minimums (at least). Post a SOA and we'll take it from there.

rosebuddd

Thank you for welcoming me and responding so quickly

So do you reckon if I applied for another balance transfer card I would be accepted?

Yes I do need to budget a lot better. Whats an SOA?

bsms1147

rosebuddd wrote: »

Thank you for welcoming me and responding so quickly

So do you reckon if I applied for another balance transfer card I would be accepted?

It's possible. The only way of knowing would be to apply.

Yes I do need to budget a lot better. Whats an SOA?

That's the statement of affairs I linked to above, helps you know where your money goes.

aznlayer

Well done for realising that your debts are a problem, it took me till I was 23 and in £26k of debt to realise they needed sorting (allbeit, part were uni fees).

The point is, stop over spending now and be committed to paying your debts off and I'm sure soon you can put this all behind you.

gazman100

Hi rosebuddd, welcome to the site from me too.

Good advice from the posters above. The good news is, in reality your debts aren't that bad, and this is a chance to recover the situation.

My only other piece of advice would be that if you do take out a balance transfer please make sure you also look at the underlying reasons for the overspend (the SOA is a great idea). So many large debts occur through more borrowing to make existing repayments and support an unchecked overspending habit.

Seanymph

To get to the SOA click on the blue writing.

It's about working out what you have coming in, what HAS to go out, and confining yourself to what is left over.

Firsty I would tell your mum and sister you are in a bit of a pickle, and if you can miss a couple of months.

Then work out what costs you the most, and pay that off as quickly as you can whilst paying minimum to the others.

That way you clear the interest you are being charged, and it saves you money.

You can do this - but figures will help you work it out.

maria3104

Hi Rosebuddd

Welcome to MSE. I have a daughter your age.

I hope you are still living at home as that will allow you to shift the debts very quickly. Once this awful burden is gone from your life you can be smug in the knowledge that you have learnt at an early enough age that debt is not for you. You will know the joy of saving for things and anticipating the joy of ownership delayed rather than the instant hit of a now purchase. I have spent my whole working life some 35 years having to watch myself and constantly learn how to manage my budgets creatively. I love the you tube money motivation shows.

Enjoy the process and be really proud of yourself once your debts are gone. Good luck.

M

When_the_going_gets_tough

Op everyone has given you very good advice. I would also suggest you look to increase your income by looking for another part time job or increasing your hours. If you work in retail the busy Christmas period is coming soon. You really need to be aiming for full time work. I know that it does depend where you live but often there are weekend jobs available.

SGT_Snacks-64

Hey!

Well done, the first step in sorting out your debts is to admit it is a problem, and to work out an action plan to sort that problem. There's no shame in asking for help and you've come to the right place!

A lot of good advice has already been given. As we have limited information on your actual income/interest rates on cards/overdraft charges I'll make a few assumptions as I go along, but hopefully you'll find this information helpful.


Credit Score

You've expressed a lot of concern with your credit score. My advice is to not worry too much about this for now. If you already have a poor credit score, making future debt repayments will help to improve your credit score later. The fact you've been making atleast the monthly repayments on your debt should reflect in a fair-to-good credit rating. You can check your credit score either on the 14-day free trial with Experian (Do make sure you cancel this within the 14 day period to avoid future charges, £14.99 coming out every month doesn't help anyone!), you can also check Equifax and Noddle. EDIT: I can't post links, check MoneySavingExpert and search "Check credit score for free"

Credit Card / Store Card
£500]/B]

The £500 I have on a credit card is coming close to the end of the 0% fee, it runs out in October, so I was thinking on doing a balance transfer BUT, the £500 I have on this card is already ANOTHER balance transfer from another credit card, so would this affect them accepting me and my credit rating?

A balance transfer would be a good idea to help stop the interest piling up and knocking your debt repayments back. Because you've been making atleast the minimum monthly repayments on all your debts, your credit score should hopefully be in reasonable order. While I don't know when you took this card out for a balance transfer originally, getting another could have two outcomes on your credit score:

1. Your available credit increases with an additional card, essentially your (credit in use percentage) will decrease, upping your score.

2. You don't get the card, you get a search on your credit score, and this will negatively impact your score.

The best way to find out about getting a card is using the MSE credit card eligibility checker for balance transfer cards (Sorry, can't post the link!) If you find a card with a high chance of acceptance, it won't hurt to try and apply for it. Getting the card would have great benefits to your debt repayment, as Balance Transfer cards usually have a high APR after the 0% period. You might also be able to transfer the store card onto this as well (But don't hold me to that).

Also as a side note. Check if you were mis-sold PPI on your credit card. It's a long shot but it won't hurt to check, and a payout would really help you.

£900 I owe my sister
£150 I owe my mum and dad

All I can advise with family debt is to speak to them. Be honest about your current financial situation an explain you won't be able to repay for a few months while you get things in order. Be open about when you can expect to repay these debts. Showing a budget (see below) would also be a good idea. I'm sure they would be understanding, as paying these debts off before the others would leave you worse off in the long run.

Overdraft
£300

I've heard some balance transfer cards allow you to shift Overdraft debt onto them. But work out the actual cost of this overdraft. How much of the overdraft is fee-free? Sometimes the cold hard truth about Overdrafts is you just have to repay them, month at a time. To do this you'll need to phone your bank each time you want to reduce your Overdraft limit.

Repaying Debts and Budgeting

So to get this problem sorted, you'll need start budgeting. There are tons of ways you can go about doing this. Personally I use an Excel spreadsheet to keep track of what I'm paying out and what I'm bringing in and the results show what I have each week for myself. You should be prepared to cut back on luxuries etc, and see if you have anything you might be able to sell to help raise funds.

You'll need to do your debt repayments in small installments. Don't pay too little so that you miss minimum monthly repayments, but also don't leave yourself completely out of pocket each month. As you said you work part time, you should be able to work out your (Guaranteed income) each month. If you can do any overtime during this debt repayment period, all the better!

I'm sorry if I'm teaching you to suck eggs with this post. I hope this information has been helpful. Keep us posted on how you get on and best of luck

Dobbibill

rosebuddd wrote: »

I'm a 21 year old, I have a part time job working 20 hours a week as a sales assistant and I have accumulated a lot of debt. Im really scared and dont know what to do? Its just crept up on me and I've tried to forget about it but now its hit me and I need advice.
Here is my debt...

• £500 Credit Card Debt
• £900 I owe my sister
• £150 I owe my mum and dad
• £170 on store card
• £300 into my overdraft

The £500 I have on a credit card is coming close to the end of the 0% fee, it runs out in October, so I was thinking on doing a balance transfer BUT, the £500 I have on this card is already ANOTHER balance transfer from another credit card, so would this affect them accepting me and my credit rating?

Each lenders criteria is different. Also your credit score/rating is irrelevant. Only you and the CRA's see this. Your credit history is what lenders will see.

I always pay off the minimum payment on my credit card and I used to pay off the store card in full every month but the past couple of months I couldn't afford it, so on my store card I paid the minimum instead of in full and also went over the credit limit, leaving me with a £12 overlimit fee. Plus my credit card still has £500 left to pay because over the 16 months I have just been paying the minimum instead of more. Does this all affect my credit score?

If your card has been on 0% and you haven't been spending on it as well you should have made a small indent in the debt, as it would have only been the capital and the BT fee you would have been paying.

I did the credit checker and it said that I was 90% to get a new 36 month balance transfer card, but I don't know if with all these other things taken into account I'd get it?

Which card was this for and which card do you currently have?

HTH

DB