A good plan to clear credit card debt?

Mahone1302

kindofagilr wrote: »

I have found this not to be the case for us, our combined income is £33k, we have £34k on cards and we have empty cards with limits of £15k, so total in credit reports available is £49k which is more than we earn?

My own wage is £12k and H@BC gave me a £5000 0% credit card for 30 months

I suppose that demonstrates the inconsistency of these things. My individual income is a little less than your combined (sorry I mean this with all due respect but no matter how I put it, it sounds as if I'm gloating, I'm really not!!) and my debt is less yet when I applied to Halifax for a 0% card they only offered me a limit of £1,700! Yet Halifax are meant to be one of the more liberal lenders, and HSBC one of the more conservative..

kindofagilr

Mahone1302 wrote: »

I suppose that demonstrates the inconsistency of these things. My individual income is a little less than your combined (sorry I mean this with all due respect but no matter how I put it, it sounds as if I'm gloating, I'm really not!!) and my debt is less yet when I applied to Halifax for a 0% card they only offered me a limit of £1,700! Yet Halifax are meant to be one of the more liberal lenders, and HSBC one of the more conservative..

That's ok I know you aren't gloating.

I know it is crazy isn't it! and B'card have wrote and told us both they are increasing our limits by £2.5k each so will have even more available, it makes no sense, they are probably hoping we will slip up (all of it is on 0%)

Kitten868

Thought I'd give you my two cents. I would put the pension on hold you have tonnes of protection for it you were suddenly unable to work. I would use that money to pay off the high interest credit cards. And I would work on my budget so I'm not dipping into the credit cards. I would keep going trying to clear the interest free cards. If it isn't working after that then you could look at loans but I don't see the need for it. I too am very naughty and kid myself that moving money is just as good as paying it off. It's not. Once you make inroads on all of this it will get easier. Do have a look at snowball calculators.
And start selling bits on eBay to build up some extra cash to repay debt. X

Annisele

Mahone1302 wrote: »

I've been offered a £10,000 loan by my grandparents to use as a deposit. If I came out of the pension I could pay this back within 3-5 years, with the added advantage that if I get in to financial difficulties, they'd be more than happy for me to take as long a break as necessary from the repayments, whilst I got back on my feet. I've considered asking to borrow the money for the purposes of paying off the debts however I wouldn't feel comfortable doing this and I'm not sure whether they'd be happy with it either. If I borrow money off my relatives then it's for investing in my future.

A loan from your grandparents wouldn't necessarily help you get a mortgage.

Lending criteria change over time, and I've no idea what the criteria will be in 2017. But if you were applying for a mortgage now, all lenders would want to know the source of your deposit (they're required to ask that, for anti money laundering purposes). Many lenders simply won't accept a loan as the deposit.

I'd also be concerned that getting your name off the current mortgage might be difficult. If your ex is relying on your maintenance payments, that suggests she doesn't have much spare cash either- so she might have affordability problems. From the lender's perspective, releasing you from the mortgage doesn't look immediately attractive.

Mahone1302

Thanks guy. I am taking all of this in and considering various options. I've used a snowballing calculator as suggested and worked out that if I was to balance transfer my interest bearing debts over to Virgin at 0% until 2018, then pay off my debts (inc. car) at £380.23 per month, the cards would be paid off by October 2021. In any event my car will be paid off by June 2020.

If however I was to temporarily come out of my pension to release money each month to add to that...

Extra £100 - Cards paid off by Jan 2020
Extra £200 - Cards paid off by Jan 2019
Extra £300 - Cards paid off by Jul 2018

I've used the snowball calc on stoozing.com, presumably this is a decent one?

Kitten868

That's the one. Just make a start. It'll feel great. The main answer is just do whatever keeps you motivated. Lots of little cards so you're regularly closing credit cards or one big beast debt. It only has to keep you on track

nkkingston

Consolidating debt is rarely a good idea, and may not even be possible. The lenders won't see it as a loan to get rid of other debt, they'll see it as a loan on top of the other debt. And unless you can get your budget deficit sorted out, you'll just end up building up debt on those cards again, so you'll have more debt than you started with.

It would be slightly easier to look at your budget if it was in the SOA format (rather than the lovely narrative you've provided!). When i run your figures together in my head, I get the impression your deficit is larger than you realise. Child support, rent, essential bills and food puts you at around the same amount as your take home pay - if that's right, all of your credit cards are deficit and are entirely dependent on overtime for being paid off. There's absolutely no point consolidating if that's true, because you can't afford the consolidation payments either.

Go through your last month's statements and put together a retroactive spending diary to see if your estimates are correct. Food especially is an area where it's easy to overlook top up shops, sandwiches at work, ice creams for the kids.

Can you get your mobile contract down a little? It never hurts to ring and ask. They oversell contracts massively, so you're almost certainly not using the allotted data/minutes (typically 130% over actual needs), and they might be willing to reduce payments to cost of the phone + appropriate cost of your usage.

You can also get your council tax moved to 12 months rather than 10. This could work out for you in terms of freeing up a little more money each month to spend on bringing the debt down (or you could keep it at 10 and spend the two months overpaying in larger amounts - but if you do that make sure that's what you actually do).