Looking for consolidation advice

Mannion32

I am looking for advice on managing my debt to stop it spiralling any further out of control.

Here is my current situation with all outstanding debts:
- 2 balance transfer credit cards with £3k outstanding (both at their limit) paying 0% for 2 years
- Overdraft of £1k paying £1 per day, usually in the overdraft for 3 weeks of the month so typically £20-£25 per month
- Owe parents £750 to pay off a car they purchased for me.
Total debt: £7750

At the moment i am paying my parents £150 a month and will continue to do some until January when that debt is cleared. I am paying £50 per month from each credit card until January when this will increase as a result of not paying my parents £150.

Basically the advice I was looking for is how to clear my overdraft and essentially stop wasting 20-25 per month and have a nasty looking overdraft.
My thoughts were to open a balance transfer card (or contact existing providers to see if they would increase my limit and offer a special rate on transfer) with a balance of my total debt amount. I would then in theory do a money transfer of £1k to clear the overdraft, freeing up the money i was paying in charges to use towards clearing the credit card.
From January onwards I believe i could comfortably pay £300 per month to the credit card, plus use my annual bonus of around £1k to help wipe this within my target period of 24 months.

Does this sound like a good plan? If not what else would you guys advice from your past experiences.

Many thanks

glentoran99

Don't try and pay debt with debt, only end up in a worse situation, You need to look at where you are overspending and address it and pay as much off as you can on the highest interest debt maintaining minimums on the others

[Deleted User]

With maxed out cards (even on promos) and living in your overdraft, you may struggle to get a BT offer - or more precisely, a money transfer offer, which is what you need.

Have you used an eligibility checker?

JimmyTheWig

Mannion32 wrote: »

- Overdraft of £1k paying £1 per day, usually in the overdraft for 3 weeks of the month so typically £20-£25 per month
- Owe parents £750 to pay off a car they purchased for me.
...
At the moment i am paying my parents £150 a month and will continue to do some until January when that debt is cleared.
...
plus use my annual bonus of around £1k

How long ago did your parents lend you the money for the car? Have you been paying £150 a month for a while and now the balance is £750? Or did they lend you £750 recently and you are just about to start paying it back? If it's a new loan then this will seem cheeky to even ask...

I'd ask your parents if you can hold off paying them back for a while. Tell them they you're paying high overdraft fees each month and would they mind if you paid that off first?
Then reduce your overdraft by £150 a month. (You don't need to reduce the limit, just reduce how much you use it.)
If they could wait 6 months before you carried on paying them back, that would be great.

When does your annual bonus come in? April? If so, you can use this to pay your parents back as you should have cleared the overdraft by around then. So that's only 3 months later than the January when you'd have finished paying them back anyway.

MEM62

Looking for consolidation advice That's easy - don't! It rarely works.

In your case the debt is manageable as is although it will require some effort on your part to clear it. (Once you have got there you will be less likely to put yourself in the same position again)

The overdraft is your biggest problem as the bank could recall this at any time. Ask mum & dad is you can suspend payments until you have cleared your overdraft and then throw the £150 a month - or even £200 if you can find an extra £50 - at that. You remaining deb is at least interest free at the moment.

Once that is cleared resume payments to mum & dad and also throw everything you can at the CC balance. You should be able to clear the CC's within two years. If not, at least you should be in a good enough position to roll over any remaining balance to a new 0% card.

enthusiasticsaver

If you can get a 0% balance transfer card I would say yes providing the balance transfer fee is not too high, you live within your means and do not borrow further. I would only recommend borrowing to pay off further borrowing if the new card is 0%.

If your mum and dad are willing to accept a lower monthly payment this may help you focus on the overdraft as the 0% cards have got 2 years to be repaid so you will have those cleared well within that period .