Fighting an endless battle..

Ezra123

Morning MSE,

I've been meaning to write a post here for some time, but it’s just finding that right moment.

I've been battling a debt ridden cycle for over 2 years now and its s slowly showing signs of paying off.

Here’s a little background of my story…

I worked and lived in London for the past 10 years trying to live the “High life” with champagne taste on Lemonade money, however, being young and stubborn at the time I thought I could do, and by god I was so wrong. I’ve ended up moving out of London to Staffordshire – and landing a better paying job, in fact £10k a year more than my London Salary and with cheaper out goings I’ve managed to get on top of my debt.

My Debt below;

Barclaycard; £5,780 (Interest charged at 21% - Monthly Payments £140 – Monthly Payments I make £300
Virgin £5,700 (Interest charged at 17% - Monthly Payments £140 – Monthly Payments I make £200
Santander123 £2000 (Interest charged at 16% - Monthly Payments £50 – Monthly Payments I make £100
Sainsbury’s Loan £17,700 FIXED at £465 – Over 60 months (3 years left)
Next Catalogue £950 £100 per Month Repayments.

Total Debt - £32,130
Total Pay £1165

Now, since the last year I’ve been ruthless with Money, and spend every penny paying debt and living costs, which are at the lowest since I haggle the best deals, do meal plans and keep and keen eye on my expenditure – every penny left over at the end of the month goes towards the highest interest credit card.

I’ve tried applying for further credit however given my current borrowing amount I don’t seem to be getting anywhere near an amount I would need to balance transfer.

I’ve recently been given an NBNA 40 month 0% balance transfer with a credit allowance of £2,400 – however I’m stuck as to what I should transfer here.

That’s my life above and any advice would be greatly appreciated!

Thanks, MSE!

fatbelly

I think I'd wipe out the Next catalogue, put some of the Barclaycard on it, make min payments to MBNA and throw as much as possible at Barclaycard.

You are effectively snowballing but should only be making min payments on the lower-interest cards while overpaying to the max on the highest interest card. Then when that one's clear, pick on the next one down the list and so on.

Have a look at this

http://www.stoozing.com/calculator/snowball-calculator.php

Ezra123

Thanks, Fatbelly,

You've given me some lunchtime reading, but yes you are right, I should pay all other card the min re-payments and throw the rest at Barclaycard.

Drawingaline

Was going to suggest looking at the snowballing calculator too!

So as fatbelly said, min payments to all but the highest interest, all spare cash at that one and so on.

Can you do a balance transfer to the next catalogue, or do you have the option to do a free from interest cash xfer to your bank from the new credit card so you can clear the catalogue. Is the catalogue on interest free atm, if not what is the interest?

Basically clear the credit cards one at a time, rolling all the spare cash onto paying off the next one etc. Once you only have the loan left then overpay, I have a sainsburys loan and overpaying is easy just call for the details and set up a standing order.

Are you saving a small amount in your monthly budget for emergencies? That is a good idea, that way you don't fall back into the cards if the washing machine breaks etc.

Good luck

Ezra123

Hi Drawingaline,

The next catalogue is free interest, so I mark this at the bottom of my priorities and hardly use it now, the min repayments fall month on month as I overpay the required amounts.

My main priority is the Barclaycard - this was one has been a hindrance for sometime so I will start putting bigger efforts into this.

I have around £2000 in savings for any emergencies, and just to note, I've not used any of the cards in the last 8 months or even longer, I clear a big enough salary to not have a need for them.

At the end of the month, generally a day before payday I clear my bank out, down to the penny to clear down Barclaycard - I sometimes have small excess income due to my shopping bills fluctuating from time to time.

I guess with my current job, it helps getting paid every 4 weeks, which works out at 13 times a year.

Ez

sourcrates

Ezra123 wrote: »

I guess with my current job, it helps getting paid every 4 weeks, which works out at 13 times a year.

Ez

Always a bonus, 13 paydays a year !!!

Good advice above.

MrsTinks

Also bear in mind when you clear the Barclay Card off they will no doubt start sending you 0% transfer offers I think I get one every single month at the moment... They get very confused when I don't take them up on it too... LOL

enthusiasticsaver

I too would focus on the Barclaycard. Make minimums on next catalogue,MBNA and Santander 123 and Virgin and balance transfer £2400 to the MBNA (not sure if you can go up to 100% of the limit so check that) and then throw as much as possible to Barclaycard, then move to Virgin and finally Santander, MBNA and Next. As someone else said this is snowballing tackling most expensive debt first. If you get a chance to get a further 0% in the meantime look to move Virgin or Santander until eventually you get it all on 0 except for the loan.

Well done for turning this around and it looks like you will be debt free very soon. We also moved out of London years ago and never regretted it. In my opinion only very high earners can afford to live there now.

Ezra123

Hi, Sourcrates,

It certainly has it benefits.

Just did some quick calculations on the above, If I make the min repayments on everything else it'll give me £550 to pay onto barclaycard including my current repayment of £300.

Now, if I do this for 6 months, the debt would be around £3300 outstanding which should be enough to balance transfer into my NBNA at 0% Interest.

I'll be getting the wheels in motion on this when my next payday hits.

Thanks everyone so far for the awesome advice above! .

Ez

Drawingaline

It sounds like you are budgeting well, good luck!

Ezra123

Hi, MrsTinks,

Its funny you say that, I've had the card for three years and ever since my deal expired, they've never sent me anything - I raised a compliant and said I've been treated unfairly as a loyal customer, to which they refunded me that months interested which had occurred on the account, since then, I've had nothing more.

Although, I've heard of current customers being sent deals, is it one rule for one and so forth?....

Ez