I need help and advice

09tooscared

Hello

I have been far too scared to deal with this until now, so bare with me. I seem to have got myself in to a pickle as follows

Card one £8829.88 - 26.43% interest paying the minimum about £210pm
Card two £17.619.89 - 29.9% interest paying the minimum about £530pm

I earn over £46k a year and today the card one sent me a letter saying they were reducing my credit limit to £400 more than the current balance. This made me panic so I did an eligibility calculator and the results show that 100% eligible to have a Virgin card with a 0% transfer for 36 months. Do you think I should apply and shift the debt from card one? Card two was a virgin card but was bought out by MBNA years ago would this be a problem? The shifted debt wouldn't be from that card so I thought it would be okay but not sure. This has been my wake up call to deal with this problem once and for all. I am depressed through the debt and want to be free. The interest on these cards is crippling. I can can cut back to pay more than the minimum payment which I will do but wanted advice on the eligibility etc. Do you think I will get it?
Thanks for all your help in advance, i am quite fragile just even writing this :(:(:(:(:(:(:(:(:(:(:(:(:(:(

old_hat

2 years ago we had credit card debt totalling 31k.

We took out a natwest loan of 25k and a low interest cc of 6k. We pay 150 min payment on cc and 871 loan (term of 3 years)

24 months on 8k left on loan and 5k on cc. This time next year debt free

If you can get a loan this approach could work....

09tooscared

Thanks for the response, wow that is amazing, well done. I have worked out by the snowball calculator if I pay off £1200 a month I can pay it off in 31 months, if i could get interest free it would be way quicker. I am not sure if they would give me a loan to consolidate the debt, do they do this anymore? Did you put that down as the reason for lending?

fatbelly

Have you tried the pre-eligibility checker?

http://www.moneysavingexpert.com/credit-cards/best-0-credit-cards#preapply

09tooscared

Yeah, it said 100% I would get a virgin card but I am unsure about the fact I had one before and then it was bought out by MBNA, I don't know if this would be a problem. The debt would be transferred from Barclaycard so I don't think the transfer would be a problem. Has anyone been turned down even though the pre eligibility checker said 100%?

old_hat

If that works for you go for that. The reason we went for a loan was because it gave us a chance to close the 7 credit cards and it meant we had a fixed amount to pay off that once started couldnt be changed.

I suppose it is what works for you.

Good luck but get the process started as soon as you can. You will soon see light at the end of the tunnel...

indesisiv

Apply for the 0% card and get transferring! The interest rates on those ones are costing you a fortune.

sourcrates

Just one word of caution, many people on this forum have been through the consolodation loan 'solution', and find out it isn't (a solution) as they tend to re-spend on the credit card accounts, then a couple of years down the line, they are back here, with twice the debt they had before, asking for help again.

You must be disciplined in whatever decision you chose to make, keep the focus on reducing the debt, not adding to it !!

KirstyO

I can't speak from experience, but if you are happy to go with a 0% CC then do that just make sure it's all paid off, or you switch before the 0% ends. This would be cheaper than a loan. Then maybe look to tackle part of the bigger one with 0%.


If MBNA now own card 2 and you never had any debt problems with Virgin, and your credit file is still decent, I can't see why Virgin wouldn't offer you a new card now. You could apply and if you don't get 0% wait a couple of months and go for the lowest interest loan you can find.


As it is only two debts, if you find them manageable I don't think you need to panic and go for a consolidation loan at the moment. Once the cards are clear, you might request lower limits or close the cards altogether? Whatever you do, make sure that you take precautions that you won't get to this stage again, and you'll have won the war.


This is all my own opinion, so feel completely free to ignore it!


Good luck, let us know how you get on!

enjoyyourshoes

Hi

if you get the 0% card, do not spend on it as you will start incurring interest on that spending immediately at a higher rate (post 0%)

set up DD immediately to rid the debt at the end of the 0% period

Sort out your spending as this is what may have caused you to have debts. Its often psychological so work out why you need to spend and triggers and then strategy to negate triggers.

Do 30, 30, 30 .

Daily 30 seconds reconciling bank account (new running balance) with all transactions (DD,SO, Pay @ pump, contacts, with etc etc) Know where you are finically every day. Thus don't overspend ! (also once you have cleared CC and are using CC responsibly, accrue daily for any CC purchases so you have cash in account to pay for it once the Bill arrives, also set up DD to pay whole amount off each month)

Annually 30 minutes working out all annual, 1/2 and 1/4ly expenditure, do cash flow to work out how much you need to accrue monthly to afford all these costs. Set up DD not high interest account for these costs. pay all insurances annually as the pesky blighters get you on interest if pay monthly.

Monthly review any upcoming DD/SO/contract, plan in diary 1 month before its due so you can start comparing alternatives ensuring you get best ideal (MSE web site has great article on this). Also review saving strategy and any investment strategy.

So its 30, 30 , 30 to plan your financial future and know exactly where you are financially every day.

Good luck

Firewalker

No question about it - apply for the Virgin card and start transferring. Meanwhile, make sure that you have a plan in place to reduce your debt and not simply shifting it around. One way to tackle this is to keep the payment costant - this means to pay on the 0% the same amount you are paying now on your current cards. Time it so that it will be all paid off in 36 months.

I know you don't believe that you can do it at the moment but it is possible. Many people here - including me - managed to pay off very large amounts of debt in very short time. It is well worth it!

Firewalker