Credit card interest is killing me

k1984

Hello,

First time posting on here having read a few other threads

Over the past few years I have accumulated about £20k on credit card debt - some of which is from covering other bills, a wedding, holidays we didn't need and a large share is from a series of stupid mistakes gambling online. That has now finished and I have excluded myself from all of the sites - my wife thinks I'm sitting with around £15000 debt. I am sitting with the following debt:

Credit cards - £22000
Debt to family - £5400
Debt to wife - £10000

Currently I earn approx £2200 per month of which

£900 pays my share of the bills/food/fuel
£200 pays my share of the cars
£200 is for lunches/general spending including birthdays etc
£200 pays towards the debt to family members
£300 currently goes towards a savings account to use to pay the bills when my wife goes on maternity leave
£500 (remainder) pays towards the credit cards

Within the next 12 months I will have £150 extra (student loan finishes) and then £300 (the money towards savings).

The interest rate on the credit cards averages about 21%. I have tried to get personal loans but having missed several credit card payments in the last year none of the lenders appear to entertain me.

I worked out that paying £500 a month I will clear the debt in about 6years. But loath paying the large amounts of interest.

Has anyone been in my position and found a quicker way to become debt free?? And cheaper loans?

My aim is for 4 years - I do get a bit of overtime to which will be put towards this.

Any advice welcome

another_casualty

Hello k
Congratulations , on giving up the gambling . By quitting that , you are a winner regardless of your financial situation.
You have a fair bit of debt ( over £20,000), and fair play to you for acknowledging what you owe , and being responsible about it .

There are others who will give you excellent advise , later on.
Have you considered a debt management plan, or similar ?
With a dmp ( free such as stepchange/ Payplan etc),you will pay a set amount against all of your debt. Much less than what you intend to pay now. The downside is , your credit rating is shot to shreds for 6 years. But , you are giving yourself 4 years anyway to pay everything back.
You might as well fill a s o a . ( not sure where the form is on here)
That's the painful part, which you will have to tell the dmp one more time . Babies cost money , so I wouldn't recommend burning your self out .
Good luck .
Over to the others...

poppasmurf_bewdley

I would have a look at a Debt Relief Order, and see if you could qualify.

http://www.stepchange.org/Howwecanhelpyou/DRODebtrelieforder.aspx

The maximum amount for a DRO is £20k, which is near to the amount you owe to official creditors. If you discount the debts to family and get your debts to £20k, it may be a far less painful way of solving your problem.

chevalier

here is the link for soa
http://www.stoozing.com/calculator/soa.php

Kitten868

If you consider a dmp they might freeze or reduce your interest. They might not be able to help you as you can afford your repayments.

I would look at snowballing. Minimums to all but one credit card. One card you make as much overpayment as you can. After 6 months you'll be in a better position. Potentially get some balance transfers.

I would stop saving £300 a month for the future seems like you pay more out in interest long term. I would also consider talking to family about stopping payment so that you can get rid of your debt and overall pay them back faster. And you don't need £200 for lunches and whatever you want. Even a few frugal months will get you ahead of the game.

Tough steps now so it gets way easier soon

rockabillygirl

Just wanted to wish you luck on your journey.
Have you tried calling the credit card companies to see if they will reduce the interest?
I'm sure others will be along with support and some good advice.