Overdraft and credit card debt

SouthUKMan

Please help! Over the past four years, my personal debt has risen to £5,000 as my monthly income has dropped a little, and my outgoings have gone up a little. About £2,200 of the debt is on a credit card, and at the end of last month my current account overdraft was £2,800. Both accounts are with Lloyds. I'm paying about £35 / £40 a month in fees on each account...so about £75 a month in total... or to put it another way, around £900 a year in fees and interest. It's also got to the point where my monthly income no longer clears the overdraft and I can't make anymore than the minimum credit card payment. Crazy. I'm not extravagant with spending, I don't have savings, and I work 50 hours a week. I'm after ideas. Is there a way I can consolidate the debt so I pay less interest? Is there a way I can move the credit card debt to another provider on a '0% interest for the first year' type deal? Is there a bank which will allow me to transfer my debt to them but offer a 'sweetener' such as a cash payment or a lower interest rate for the first year, etc. Any help would be very welcome. I'm single (although I have an older child who lives with me), I'm not entitled to benefits (I have checked) and I am already frugal with my outgoings. Thanks for reading.

grumbler

Yes, theoretically you can consolidate your debts in a cheaper loan.
Yes, theoretically you can transfer your CC balance to a 0% or a low rate CC. Some 0% CCs offer 'money transfers' to current accounts to clear overdrafts.
Yes, theoretically you can switch your current account for a bonus and/or, possibly, 0% overdraft for a year, although switching £2.8K overdraft doesn't seem to be realistic.

Theoretically - because all depends on your income. Banks don't like lending to heavily indebted customers with low income.

• Cheap Loans
  • Loans Eligibility Calculator
• Balance Transfer Credit Cards
  • Balance Transfer Eligibility Calc
• Best Bank Accounts
• Cut Overdraft costs
  
  
  
  
  
  
  
  

Also, it looks like fees and interest were not the main reason of your debts and shifting/consolidating debts won't solve the problem of the disbalance between income and outgoings. It's worth posting your SOA on the DFW board for an advice.

Super_Whiskey

Go in to your bank to see what they can do. Obviously Lloyds won't offer you any sweetener deals but that shouldn't be your priority. If they can't consolidate it then you should refer to their financial diffulties team as if you can barely make the minimum payment then it'll take ages to pay the c/c off.

oligopoly

As grumbler said, if it were me i'd look to take on a new credit card (check eligibility first) - one which a) is 0% interest balance transfer and b) that you can use to clear your overdraft with.

This way your debt would still be £5k but it would be in one place and would give you a little breathing space with no interest.

Next, put together a repayment plan. You need to closely look at your ingoings and outgoings and work out what can be changed/reduced. Expensive Sky TV deals, higher than usual breakdown cover, takeaway food etc.

Is your child under 16? If so you're eligible for child benefit (£80 per month).

SouthUKMan

Thank you all for your help and suggestions. My average monthly take home pay (after tax, etc) is about £2,100. I will explore the possibility of finding a credit card lender with a view to finding a 0% interest for a year type deal so I can clear both my existing credit card and overdraft debt. Grumbler, you are correct to say that the fees I currently pay every month are not the main reason for my debt. However considering that I am paying around £900 a year in fees, if I can find a way to avoid paying this (and therefore adding to my debt mountain) then surely I would be silly not to pursue this? Assuming there is a lender prepared to take me on based on the above scenario, can anyone spot a flaw in the plan? Yes, I know this won't clear my debt...however if I can avoid paying out £900 in fees over the next 12 months, then surely this would be a sensible thing to do? Thanks again everyone. This is a great resource.