Feel so alone

Popstess

rolls99 wrote: »

Everything crossed for you


Regarding the "Spend" on the Credit card:


Say you have £4000 at 0%. That "Should" be a ring fenced amount - so
your statement says "0% until January 2017" or whatever.


So, taking this, and Very, you owe £5000 in total. (£1000 to Very)


You make a payment to Barclaycard of say £140, and your balance lowers by this amount;
you owe £140 less to Barclaycard (so your debt drops).


BUT Very is still sitting at £1000.


Say your shopping budget is £100 a week.


For one week, spend £100 on the Barclaycard.


This "Frees up" £100 from your shopping budget.


Pay that £100 to Very which takes it down to £900


In the meantime you pay your regular Barclaycard payment.


You will pay standard interest rate on your £100, but
because you are clearing this off by paying £140 (i.e. pay in more than you spent)
then the interest is minimal.


Your 0% balance will not attract any interest, but, it will only drop by the amount "Over" what youve
spent minus that and any interest - so about £30-£40 (about £100 less)


That doesn't matter because for the moment it's not attracting interest.


Obviously you need to be aware of when the 0% ends but, it is still cheaper than Very so
all things being equal you'll save money if you can't attack Very another way


What you wind up with, is having paid down Very (and avoided their higher interest).


You could do this each month, which will mean paying, over time, interest on £100 for a few days.


You still have the same shopping money as if you spent it anyway (i.e. minus the £100 to Very)


If you could manage this for ten months, that means Very is done and dusted then you can concentrate on cards.


At any rate, Barclay is still a lower APR than Very too.


Although you are "borrowing" on the Barclay, your overall debt (by paying Very) is still dropping.


Remember, tho - stick rigidly to the £100 (or whatever works) but you're effectively
Transferring Very onto Barclaycard at £100 a month and paying a small amount of interest.


but Please double check your 0% isn't affected; it shouldn't be but best to make sure

Thanks I'll look Into it

rolls99

Popstess wrote: »

Thanks I'll look Into it

One thing I would say; timing is everything; if you go ahead, spend the £100 (or whatever) a couple of days before your Barclay statement; once you then get the statement, pay your normal payment as soon as; aim for less than a week between spending and paying (with the statement in the middle of that time) and that minimises the interest paid; the interest won't be massive - 20% apr on £100 is £20 divided by 12 (£1.67 per month) but then that is split down daily (£20 times 365)

Popstess

Brill thank you so much for the advice

rolls99

Popstess wrote: »

Brill thank you so much for the advice

Just something to chew over , even if a "What if" scenario.

Popstess

rolls99 wrote: »

Just something to chew over , even if a "What if" scenario.

Yes it certainly is thank you

f0xh0les

As you already have a mortgage and credit and are keeping up with the repayments, your credit rating is obviously ok, so have you thought about tarting between banks for the £100 - £150 for switching bank accounts? If you just opened one current account with a bank, then switched to Halifax to get the £100 then switched to Clydesdale for an extra £150 and then First Direct to get their £100, leave it 6 months and then leave and they will give you another £100 as an unsatisfied customer bonus, it is a good couple of hundred to chuck at your debt for not much time spent. There is no minimum time at The Halifax to get the switch bonus, you could switch as soon as the money hits your account, which is less than a week.
Just a thought.....

Popstess

f0xh0les wrote: »

As you already have a mortgage and credit and are keeping up with the repayments, your credit rating is obviously ok, so have you thought about tarting between banks for the £100 - £150 for switching bank accounts? If you just opened one current account with a bank, then switched to Halifax to get the £100 then switched to Clydesdale for an extra £150 and then First Direct to get their £100, leave it 6 months and then leave and they will give you another £100 as an unsatisfied customer bonus, it is a good couple of hundred to chuck at your debt for not much time spent. There is no minimum time at The Halifax to get the switch bonus, you could switch as soon as the money hits your account, which is less than a week.
Just a thought.....

I'm with Halifax at the moment. I missed he £150 switch for first direct. I have thought about this but the horror story's of people having loads of problems with direct debits etc freaked me out a bit :eek:

Synonymous

Hi Pops, well done on making your first steps to becoming debt-free, you've come a long way since your first post already.

I was just reading Rolls's ideas and your comments on matched betting, and I had a few thoughts I wanted to share.

You are doing really great in a short period of time, but remember as a debt-busting newbie the temptation to spend is always hovering close-by. Everybody falls off the wagon sometimes and that's totally normal. If I were you I would carry on as you are, chucking all of your spare money straight at the worst debt - once that money is gone on the debt you can't be tempted to spend it on something else - which is a possibility if you start borrowing from Peter to pay Paul with your other cards. I'd suggest that unless you are earning amazing interest on the money you're saving to pay your Very account, to start overpaying it now - then you can't be tempted to spend it - Very really is going to incur huge interest when it runs out.

If you start juggling payments too much you could slip up and miss a payment just through error rather than lack of funds, and it will hit your credit file just the same and your chances of getting good 0% BT deals when the time comes. Be careful not to change too much at once, and to find your feet in this debt-busting malarkey, even though it's so tempting to try and do everything at once to get rid of it.

Matched betting is still gambling, and having looked into it myself in the past I decided it would take too much time to be confident enough in my knowledge that I wouldn't lose money through an error as much as anything else. Even using free sign up offers you will still probably have to speculate your own money initially which could have gone straight to your debt. Perhaps focusing your energy on ways to make money that have less risk and more chance of results would be better? You said clothes were your addiction - can you Ebay some items - especially coming up to the party season - that way the things you have to show for your debt are helping you to pay it off

You might have already, but I think a definite calculation of how long you have until the Very deal ends, and how much you need to per week/month to cover this could help - then if there is a deficit you know exactly how much money you have to find/earn to get there.

Also, don't forget about that loan - even though it's fixed it is still your next highest interest rate and paying it sooner will reduce the interest you pay overall (just like overpaying a mortgage). Have a look at some calculators and see how overpaying it just a little bit per month could help in the long run. After the Very account of course!

Sorry for the long post, but last thing - one of Ninja Saving Kat's key principles is pay your debts first rather than waiting to see what is left at the end of the month. So if you do start saving £xx on the gas and electric or the mortgage, set up a standing order and send that surplus straight to your debt - that way you wont miss it or splurge in another area instead.

(Hope none of this sounds too militant - I tend to take a hard, practical line on debt as NSK does!) I'll join you counting down til payday so I can fiddle with my spreadsheets and write the next budget

joedenise

I agree with Synonymous. It is far better to pay off what you can as soon as you can from your high interest borrowing - as he says if you're saving it to pay it off when the 0% runs out and you want money for something else it's too easy to just "borrow it" from those savings. Much better to just pay it off the Very account.

Once Very is paid off, he suggests starting on the loan but before doing that you need to check with the finance company whether you are actually able to do this as, like mortgages, they sometimes have an Early Redemption Charge on them. I've certainly had loans like that in the past and it's just better to let them run their course.

Denise

Synonymous

joedenise wrote: »

Once Very is paid off, he suggests starting on the loan but before doing that you need to check with the finance company whether you are actually able to do this as, like mortgages, they sometimes have an Early Redemption Charge on them. I've certainly had loans like that in the past and it's just better to let them run their course.

Denise

That's a good point Denise - some wont let you, as you say, some early redemption charges don't kick in until you overpay a certain amount, such as a percentage of the total loan, per year. But definitely check either way and then you know for sure what your options are. Even if you could overpay I would send a bit extra to it but also be planning what you're going to do when the 0% ones run out, know what each interest rate will go up to etc. You never know if you'll get the 0% deals, and if so how high/low a credit limit you will be offered.

Forgot to also say, the quickest way to stop paying for your premium Halifax account would be to ask them to downgrade it to a Reward Current Account - there's no fee and you still get the £5 reward if you pay in £750? a month and have at least two direct debits going out. Should be able to do it same day and you can put that monthly fee to your debt, then you can decide later if you want to switch fully elsewhere. Going in branch would be easiest way to sort it unless your existing account is online only.