What a year!

enthusiasticsaver

morecambe.bae wrote: »

Hi enthusiasticsaver - I checked with clearscore last month and my main issue was:

1) I had a few over penalties on my Santander CC, oops
2) I was consistently maxing out my credit card.

So, I increased my overdraft and shifted a large amount of my credit card debt into the overdraft, then reduced the credit card limit by £500. Sounds mad I know, but the following month my credit score improved by 12 points! Seems they don't care how much debt you have, only how much of it is in credit cards?!

Your credit score will improve the longer you are consistent with payments but that overdraft at £1 per day works out effectively at 20% per annum on 1800 which is actually a higher rate than your credit card. As the balance decreases the interest rate will increase so you are actually paying more for your overdraft than your credit card. Did you move it to overdraft to try to get a 0% card? It is actually working out more expensive on the sort of charging structure Santander uses.

morecambe.bae

eep Yes I thought if I reduced the credit card i would be in a better chance of getting a 0% balance transfer in the new year. I'm also planning on snowballing the overdraft first, it should be cleared in 4-5 months... in which time it'll have cost me £150 in charges. Not my smartest move :eek:

EssexHebridean

morecambe.bae wrote: »

Thank you, i really do appreciate you taking the time to look at my SOA and you make some great points.
I am not breaking any laws re: TV License as I don't watch anything I'd need a license for.

My water is charged by my landlord, it's not metered and I can't do anything to impact or reduce it. If that's a share of water rates then that's fair enough - and probably reflects what you may pay in metered charges anyway
I can't change my phone contract, it's fixed for another 18 months. It doesn't bother me as I have so few outgoings - notice no internet? That's free with my rent.
The only time I spend outside of my travel pass is if I take a train elsewhere to visit someone, but that's so sporadic and rare I can't really predict it. if I have the money, I go. If I don't, I don't. I live in a major city, within walking distance of everything so I only really take a bus to work and that's covered on the bus pass.
Yes, my prescription is every month. This level of anxiety will do that to you
I definitely need an emergency fund, I know, but I also feel like it's pointless trying to save while paying off debt? I guess I should budget something for emergencies :-/ Definitely. To be honest probably a pot of £500 would do you - that would come somewhere close to having a bag snatched and losing the contents including things like phone and keys, I'd suggest. A homeowner needs more simply because of the risk of a big appliance failing

My overdraft isn't 0% but it's a set £30 fee. (£1 per day up to a max of £30)
My tesco CC repayments are calculated so that the card will be paid off by the time the 0% interest ends. There's no way I can stray from this as I'm only paying the required minimum every month. definitely stick with doing that - absolutely the right thing in the circumstances.

I'm not sure how you arrived at £350 extra for debt payments, unless you went with a hard £25 per week for anything other than food? I did. Short term pain for long term gain is the way forwards with this - I'll explain why below.

I really do appreciate you taking the time to look at this, thank you I think my head is just spinning now.

morecambe.bae wrote: »

Hi enthusiasticsaver - I checked with clearscore last month and my main issue was:

1) I had a few over penalties on my Santander CC, oops
2) I was consistently maxing out my credit card.

So, I increased my overdraft and shifted a large amount of my credit card debt into the overdraft, then reduced the credit card limit by £500. Sounds mad I know, but the following month my credit score improved by 12 points! Seems they don't care how much debt you have, only how much of it is in credit cards?! Absolutely utterly mad, you're right, but that's a lesson you know now.

OK - first up, stop worrying about shifting to 0% cards if the eligibility calculator doesn't suggest it's workable. One thing you might check is whether your existing Tesco card will allow a money transfer at the 0% rate - chances are it won't, but for the sake of a phone call, it may be worth asking. You want the same period as you currently have, and for it not to shift the existing £150.00 onto chargeable interest. If they say they could do it but it would be reliant on you clearing the existing £150 first, it's still a no-brainer, go with it as it'll mean you can shift the overdraft across and lose the interest on that.

I said above "Short term pain for long term gain" - the reason is that you're losing focus now - it's all feeling like hard work and effort and now you're facing a further period of no fun and it's all a struggle. BUT - if you take your eye off the ball on this now, momentum will go altogether, the urgency will fade, and I GUARANTEE you will be back here in a couple of years with a debt figure higher than you have now, and anxiety levels even worse, too. You are now just 10 months away from being free of this - and able to move forwards, live your life without the constant worry about debts. I was eight years slogging away clearing debt and mortgage, but now it's done I can assure you it's the most incredible feeling and worth every second of the effort. Yes there were times I resented turning down a second drink in the pub, or having to choose the cheapest thing on the menu AGAIN - but the end goal made it worth it in the long term. there are a lot of folk on here that have been at this game even longer too - and are still going. I absolutely promise you that it will be worth these last few months.

morecambe.bae

Thanks for the reply and encouragement

Would you suggest closing down cards once they're paid off or not? Only because my long term goal is getting a mortgage so I'm conscious of my credit score.

EssexHebridean

morecambe.bae wrote: »

Thanks for the reply and encouragement

Would you suggest closing down cards once they're paid off or not? Only because my long term goal is getting a mortgage so I'm conscious of my credit score.

Personally, for the time being, I would. What is going to impact your credit score at the moment more than anything is consistent, regular payments, NEVER missing a payment, and not keeping cards at their max. For now, concentrate on getting everything paid off. When you get to the stage of clearing the final card, then once it is cleared, set the payment to "Clear all" each month and start putting small regular spends on it - either transfer the money straight across to pay it or make sure that it is there ready when the DD comes out.

enthusiasticsaver

I agree with EssexHebridean in that if you slow down now you probably will lose focus and allow the debt to creep back up again. The things you mention wanting to do like learn to drive are expensive and doing that whilst clearing debt would be mad in my opinion. Same goes for holidays. Clear the debt then start saving for all these things you want to do and know it is being done within your budget.

sourcrates

Guys,

For the millionth time, Credit history counts, credit score means nothing.

morecambe.bae

Sourcrates I suppose that's what I meant, but thank you

EssexHebridean

sourcrates wrote: »

Guys,

For the millionth time, Credit history counts, credit score means nothing.

I was terribly tempted to add the word (fictional) before "credit score" in my reply! :rotfl:

morecambe.bae

Thanks guys - I decided to set up a diary over on the diary board... it's called "Adventures of Keyring Girl" :-)