Best way to deal with 28k high interest cc debt

ronnyw26

Hi everyone.


I have accrued just under 30k debt on 7 separate credit cards over the past 5 years. Each card was initially on a 0% deal but over the years these have run out and I haven't reduced the debt. my problem now is I cant get a new card due to my high proportion of credit utilised on the cards I have (95% at present). The card with the highest amount on is Barclaycard with 14.5k, minimum repayments on this are £330 a month (£250 of this is interest). I then have the other cards owing between 1.5k - 3k each, with minimum payments around £50-80. I am managing to keep up with the minimum payments for now but struggling to make any further dents into the balances. If I continue with the minimum payments it will probably take me 100 years to repay!! Does anyone have any advice on how I might be able to either reduce my interest rates (ranging from 19% to 29%) on these cards? Or there might be a way to consolidate them into 1 payment? I am trying to protect my credit score as the main thing affecting it at the moment isn't defaults but the high proportion of credit utilised. I feel very trapped as im paying over £700 a month back but probably only paying off £150 of the debt.


Thanks in advance for any advice.

National_Debtline

Hi

It’s worth posting your SOA figures here to see whether anyone can offer suggestions on where you might be able to reduce your outgoings. That way you might be able to free up extra money to pay towards debts.

There’s a SOA template here:
www.stoozing.com/calculator/soa.php

I’m not sure on your options for taking out more credit to consolidate though. Aside from 0% balance transfer cards sometimes people take out a loan to consolidate. That would depend on whether you’re able to get a loan with a sufficiently low interest rate to make it worthwhile.

James
@natdebtline

chevalier

Begs the question why are you protecting your credit score. Are you looking to buy property soon? If not then you may need to bite the bullet and enter into some for of arrangement with them.

Re the soa James mentions above, fill that in for your own piece of mind, to show youself the true figures. You may be able to cut back.

General advice, if you have been with a utlity or insurance company for more than a couple of years, then you are probably paying too much and should check out comparison websites.

I doubt that you would be able to get a consolidation loan for that much debt, and would you hand on heart cut up every single card? If there is even a sliver of doubt don't do it.

good luck
chev

sourcrates

ronnyw26 wrote: »

I am managing to keep up with the minimum payments for now but struggling to make any further dents into the balances. If I continue with the minimum payments it will probably take me 100 years to repay!! Does anyone have any advice on how I might be able to either reduce my interest rates (ranging from 19% to 29%) on these cards? Or there might be a way to consolidate them into 1 payment?

Hi,

Do as James suggests, and post your SOA.

You really need to just stop and think about where this is all going, you have built up this debt over the years, most likely from bad decision making, so what do you think will happen, if by some miracle you are granted a consolidation loan ?

Thats right, you will spend on the cards again, and before you know it, your debt will of increased again, and all control will be lost.

Look on this moment as an opportunity to sort out your finances, you cannot keep paying minimum payments, the interest will cripple you, so the only answer to that is either boost your income, or ditch the interest, and start some kind of debt management plan, your SOA will tell us which route will be the most likely.

enthusiasticsaver

This unfortunately is the trap with 0% cards. When the deal runs out the rate is usually pretty high and hence why it is important not to get in the position you are now in particularly with so many of the cards.

You are now at a critically high level of debt unless you are on a very high salary. You need to budget (do an soa as others have said) and keep a spending diary so you can see where all your money is going. As the debt has accrued over the last 5 years you are overspending by probably more than £6k per year over and above your income. The only way to reduce this is to budget, keep your outgoings less than income and make a plan to reduce the debt by repaying the cards by focusing on most expensive first and pay minimum on all the rest. If you are now struggling with even minimums then consolidation is definitely not for you. Listen to the advice of sourcrates above. He has been where you are and speaks wisely.

First step is cut the credit cards up so you are not tempted to spend any more on them and keep a spending diary so you can post a realistic soa.