Debt, debt, debt

villafan10

So this isn't on my behalf but my sisters. She may not want this advertised but I wont name her so I imagine there isn't a problem.


My sister has £15,000 debt. She works part time and her partner works full time both on only just above minimum wage. They have 3 children and rent a 3 bed house from a housing association.


I knew my sister wasn't good with money and since I discovered Martin Lewis about 10 years ago I have been. I have unsuccessfully tried to change my parents attitude with money but although I helped them out they fell back in to bad habits unfortunately. I had never tried with my sister until recently when I discovered, partly by nagging, how bad my sister's situation was.


Since then I have taken it upon myself to sort her out! Thanks to this site I have given her the confidence to make a number of changes. The first thing was to try and shift her debt to a cheaper alternative. She looked for a loan and was interested in the 3.8% from hitachi but when she applied was quoted 15.9%. This wasn't much better than what she had across her 4 credit cards anyway (1 was interest free for 15 months, 1 is at 16.9%, 1 is at 18.9% and one is at 26.9%!) So she decided not to go for this and has on my advice decided to change her spending habits. I have advised her to fill her 16.9% card up to the limit on every day expenses and then use the cash that she had not used on these said expenses to pay off her 27% card. She is not reducing her debt but simply shifting it to cheaper.


I have then explored her utilities. She has a standard meter for gas but a prepay meter for electricity. She's now got an appointment to change her electricity meter to standard and will move on to a cheaper tariff that's £422 a year cheaper!


I've explored why she has a packaged account costing her £17 a month (for 5 years) when she only really uses the free overdraft it offers. She has since downgraded this account and made a complaint about misspelling. So in addition to the £204 a year saving from not having the account she has been credited with £517.24 for the misspelling of the account. She has used this to get herself out of her overdraft and go towards paying off her husband's overdraft.


I have then signed her up to sacrifice £1060 of her tax allowance to her husband. Saving them £212 a year.


I'm now currently looking to get him a rebate on uniform washing costs and to backdate it 5 years and will look at changing her bank account and once her husband is out of his overdraft change his too.


For now I'm thinking first direct for the both of them. Does anybody know whether there's any stipulations for getting the £100 for leaving first direct? I know they're highly rated by customers but I'm thinking of just taking all the money on offer by joining them with both accounts (gaining £300) and then leaving after 11 months (gaining £200) and then shifting to another bank (I assume some offers will still be on) and getting further. I just need to know whether you can simply leave first direct to get the £100 or if there are any hoops to jump through.


So up to this point I've saved her over £1,000 this year in cold hard cash, that's not including interest saved from paying off overdrafts and towards cards etc. Not bad for a mornings work huh?