Which is the best way to play this?

TAG

OK, we've (or more to the point DH has) got 6 credit cards, 1 personal loan, and a DFS loan.

Before I start please don't make any comments about maxing them out, shouldn't this and shouldn't that. There is a reason they are all so high. Which I'm not prepared to go into. Suffice to say the majority of this debt was beyond my control, could and probably will happen again so I'm looking for you guys to help me with the best course of action in paying this off realistically and as quickly as possible.
Virgin £7200.00 0% ends October then switches to 29.9% APR:eek: Limit £7.2k Min payments will be 5% of outstanding balance. OMG! I make that to be £360 a month. Am I right or wrong?

Morgan Stanley £700.00 maxed now as they reduced credit limit:rolleyes: Min payments £12 a month.

Barclaycard £1400.00 maxed now as they reduced credit limit:rolleyes: Min payment £29 a month.

Marbles £2100.00 limit £2.2k. Entirely my debt as an additional card holder. Not fussed if this gets lumped in with everything else or not. As I will still continue to pay or contribute £75 to £100 a month towards this. Min payments £43.00 a month.

HSBC £2050.00 sitting at 0% til March/April next year. Limit £5k. Card locked away and has not been used. Min payments £62 a month. ( I did try and get DH to top this up from another card, but it fell on deaf ears.) Too late now anyway.

Capital One £60.00. Not fussed about this one as will be paid in full anyway next month. Only a £200 limit anyway, so easily managed. Plus I have the card.

My head is spinning with what to do about all this.

All payments on everything are up to date. None has been missed or paid late. And we've always paid more than the minimum on the credit cards. (Except HSBC as that's at 0% anyway)

DFS (I know) £252 a month ends Dec this year. DH wanted this paid asap.
So now only 3 payments left.

Black Horse £181.49 a month til Aug 2008. Loan was originally £5000.00 over 3yrs at 19.9%. I know the APR is scandalous but DH had no credit history and it has served it's purpose.

Now the problem lies with what Virgin have just sprung. I have been paying £375.00 plus a month off of all the credit cards. We can still afford to pay this amount even with the Black Horse Loan and DFS Loan.

So here's that argument we're having at the moment....

DH wants to take out a loan and consolidate the whole lot. (Except DFS) That includes paying the Black Horse Loan as well. I don't see the point in this as we only have 10 payments left and would end up paying interest on the interest we have already paid?

He wants to borrow 15k over 5 years. Say at 7.8% that's £300 a month.

If I'm honest I don't want to go down this road again. This wil be the third time. How ever if it proves to be the best way then so be it. It all has to be paid one way or another.

I'm torn between maybe a 0% or life of balance transfer for the credit cards. If we can get another one. I'd like to leave Black Horse as it is and then throw the money freed from that next Aug at the credit card debt. So in effect increase the payments to £500 plus a month.

Once the DFs loan is paid that will just go back into the pot so we can't take that into account.

All payments on EVERYTHING are up to date. None has been missed or paid late. Have always paid more than the minimum on the credit cards (except for HSBC as there's no point).

This year we applied for the HSBC card ( March) and the M&S card about 2/3 months ago,which was declined. But I didn't realise at the time that they're part of HSBC and Marbles.

Any help is greatly appreciated. And sorry for the long post.

Burlesque_Babe

Hiya TAG

There won't be any comments from anyone about maxed out cards etc etc etc - I think the majority of us have been there done that (got more than 1 t-shirt!)

I think 0% is the way to go if you can tart round the cards. Halifax are offering 12 months BT at 0% and Nat West 13 months (I think). Mint are also offering 12 months 0% on BT's.

If you could get the balances transferred to those (or a combination of those) for another year, it would be a chance to get rid of as much as possible without going down the consolidation route. You could then review in 12 months time. by then DFS would be paid off as well so you would have that money each month to chuck at the cards.

Might be worth popping up an SOA to see if we canhelp you find some areas to juggle around/cut back so you've got even more spare to reduce the CC balances.

I'm sure it can be done without going down the consolidation road - you are 100% right - it will be adding interest to interest.

Lucy1982_2

Hi

I never judge, we run up debts for various reasons, but come here for help to pay them off. I would suggest having a look at this website http://www.whatsthecost.com/snowball.aspx?country=uk But in the details of your current debt and see how much interest you would pay against how much you would if you have the new consolidation loan.

Although if you go down that route, I would suggest cancelling all the credit cards so you can't get into this situation again.

Good luck.

Also have a look at the post called first time poster and pop up a statement of affairs, there may be places you can save money that you haven't thought about.

darich

Phone Virgin and ask if they can extend or give you an introductory 0% interest rate on the balance.
I did that a few weeks ago - interest was going to go from 2.9% to something like 24.9%. I phoned customer services and asked if the introductory rate could be extended.
He said no but he could reduce the "standard" rate - he immediately and without any arguement reduced it to 13.9% - that's a level that most cards are at if you're outwith any special promotional rates.

I know it's still 13.9% more than 0% but it's less than half of the 29.9% they're proposing

Phone Virgin and ask - the worst they can do is say no.

rog2

No judgement here, TAG - You've been given some good advice already - just TRY and avoid 'Consolidation' - it looks tempting, but it's adding more debt to the pile.
For some Professional, Independent and Free advice, you could try talking to CAB or CCCS.
Good luck.

climbgirl

Can we have a bit more info from you please? It would be helpful to know details of your budget and income so we know how much spare you've got to repay the debts each month. There's already been some good advice on 0% cards and finding lower rates. Once you clear a card fully, it's possible to ring the provider and ask for a low interest rate on any transfers. They'll often make these offers themselves to try and woo you back!

One thing about your post really worries me though - you state that the reason for your debt is beyond your control and that it could and probably will happen again. I'm not trying to pry here, if you don't want to share details that's fine. But it worries me that you think this kind of debt can happen again. Is there nothing you can do to prevent that? The one thing you need to be in control of as much as you can is what happens to you financially. As I said, not asking for details. I just want you to think about taking steps to prevent the debt occurring again. It worries me that you think it probably will.

TAG

He likes to back three legged horses.:rolleyes: Has done for donkeys years - if you'll pardon the pun.:p

Anyway, he does it, I know he does it. Unfortunatley it is so much 'a way of life' for him I know it will never ever change. If on the odd occasion he does win he gives me some which gets squirreled away.;) The rest will just go down the road again. :mad:

That's not to say it's all entirely his fault as yes we've had a holiday/s and bought stuff for the house etc. But the majority is down to him. He has improved, but not enough, but there ain't much I can do about it.

He works hard, all the bills are paid and we never go hungry or without but....
it's only a matter of time before this all spiral's way, way out of control.

We need to sort these cards out, but, if I'm honest, I want him to learn a lesson as well. Maybe that will trigger the LBM. God know's I/ we've/ he has tried everything else. He sees consolidation as an easy get out. I want him to have to put the effort in and face the consequences of his actions.

Anyway, I don't want to get into a debate about the rights and wrongs of what he does. Or that he should seek help here or there. Believe me it's all been tried. And when the person does not want to stop. They quite simply won't.:mad: In the end it's all a damage limitation excercise and the hope that one day things will change.

So, household wise everything is ok. As I've said all payments are up to date. It's just these cards.

I'll get him to do what darich suggested. That would certainly help alot in the short term.

sammy115

TAG wrote: »

Believe me it's all been tried. And when the person does not want to stop. They quite simply won't.:mad: In the end it's all a damage limitation excercise and the hope that one day things will change.

sounds a bit like my marriage actually. Not sure what to suggest except to wish you good luck in whatever you decide and you certainly won't get slated from me....

climbgirl

TAG wrote: »

Anyway, I don't want to get into a debate about the rights and wrongs of what he does. Or that he should seek help here or there. Believe me it's all been tried. And when the person does not want to stop. They quite simply won't.:mad: In the end it's all a damage limitation excercise and the hope that one day things will change.

Ok, I'm not going to debate you - I know from experience with addictions that you can lead a horse to water but you can't make them drink.

Let's focus on the damage limitation - you need to protect yourself financially and your kids (if you have them? Sorry I forget!). You need to start taking steps to make sure any money you earn yourself is protected and that your credit rating is too. Do you have joint accounts and joint debts? Things are ok now but if it goes downhill then any effect on his credit rating will hit yours if your names are linked financially.

I know you should be piling anything extra into paying off these debts, but quite frankly, I wouldn't spend my hard earned money paying off someone else's gambling debts. It's entirely your choice, but I'd start making sure I was stashing away anything I could in an account where he couldn't touch it. You have to start protecting yourself (and kids?) financially.

Hmmm, that was starting to get into the debate a bit! Sorry. I feel for you, it's a hard situation. To be completely honest though, I feel like there is little point in you even trying to pay back these cards without him on board as well, it feels like you're just pouring money into a debt that is most likely only going to get worse. If he isn't going to change his ways, you'll pay all this off and end up where you started.

I'm sorry to talk about him changing, but it's hard to give good debt advice when only one person in the partnership is committed to changing their ways. If you see what I mean. My instincts are for you to protect yourself - save your credit rating and put away as much as you can. Maybe that's not right, maybe that's not what you'll choose. It's a tough situation.

Where do you stand on joint accounts, your own personal income etc?

climbgirl

One thing - the consolidation idea is a particularly bad idea in this instance. They're not usually recommended by this board anyway because people have a tendency to consolidate and clear the credit cards and then run up the credit cards again. So you end up worse off.

I think in this situation with what you've said about the gambling issues, consolidation is a very, very bad idea. If your husband hasn't changed he will almost certainly run up debts on the empty cards alongside the consolidation loan and you'll end up in a pretty bad mess.

Please don't think I'm being harsh. I just think that in light of what you've told us, consolidation is an extremely bad idea.

TAG

Yes there are 2 children. I work part time doing 3 jobs. Sounds alot but it's all pretty flexible so I can work it to my advantage wage and time wise. DH gives me £50 a week towards the shopping as well. Plus CB and a whole £10 a week in TC. That all goes straight into my account.

He often bangs on about me working full time. But I know that if I did he would just gamble more and our situation wouldn't improve. He would gamble his entire wage if he could every week (as he has in the past) whilst I paid the bills. Which is bloody selfish when I think about it. In effect it means that I can't earn a full time wage even if I needed/ wanted to. God, now I'm getting myself into a debate about myself.:rolleyes:

No joint acccounts. I refuse point blank to have any. Everything is in his name only, including the mortgage.

Your right. I won't be party to helping to pay off any gambling debts either.

At the moment I'm saving £50 a month into my savings account, which he does know about. But now that it's at the £400 mark, I'm gonna open another one which he won't know about and start putting money in there instead. I know should really be throwing this at my credit card debt but if I do that and everything goes wrong then I have no back up. Especially as cc companies are slashing limits left right and centre. And it's his card anyway.

Personally, my credit rating doesn't exsist as I don't have anything on credit.
But for now I'm not that bothered. I don't need any credit at the moment.

I didn't really think about how hard it would be for you guys to help in view of the situation.

As for consolidation, I know it's an awful idea. The original £5k loan was to pay off GD. Then he added 10k to the mortgage 2 years ago to pay off more. Now we're up to 13.5k again. The best bit is he ain't stupid. I often tell him he's the thickest clever person I've ever met. IYKWIM.

I think really I wanted to come on this thread with the consolidation v 0%/LOB argument and be able to show him the advice on which really would be the best option.

Trouble is I don't think I'll show him any of it now.:o