£11k paid to credit card over 4 years but only £300 paid off debt!

Money_Rollercoaster

I had a look at a loan calculator and it said that a debt of about £15k, paid off at around the £220 a month mark and your APR of 19.4% would take you more than 20 years to pay off and you'd pay £40k in interest in that time. Sobering thought eh? It's a good job you're not posting in 2033 and only just realising where your money's gone!


Regarding who to pay off first, yes, it's generally better to pay off the highest interest debt first, but I would 100% understand if you thought that Halifax didn't deserve another penny from you and clear that. I'm pretty sure I would!

Tryingtocleardebt

Ouch!
I know in the small print there is all the conditions etc, but no one really ever explains it so you understand! Yes, there is an element of responsibility to know what getting a credit card means, and understanding the way the interest works, but when you're young it's like 'free money' and obviously I learnt a long time ago that isn't the case......especially now!

ViolaLass

You get different paperwork now, spelling out exactly what you're complaining about. Not that they can force you to read it of course, but it is there.

I would still pay off the highest APR one. It will save you the most in the long run. Your other debt sounds like it's 'only' about £5k, is that right? If so, you can afford to throw money at more than one.

annandale

Your issue isn't the fact that you've paid only the min payment. It's the fact that the interest rate on your card was so high. Did you not get statements showing you how much you had paid and how much interest you were being charged every month.

foxy-stoat

Tryingtocleardebt wrote: »

I am now in a position to start paying some off, and last week contacted Halifax to ask about my credit card and the APR (following instruction to pay off the highest APR first), and I was shocked to discover since November 2012 I have been paying £222 a month yet only £5 a month of that went on the debt!
So in all that time I have paid Halifax over £11,000 but only paid £300 off the overall debt!?
How, when people are getting PPI back, account fees etc, can this be fair?

But you must of received 52 monthly statements, these will clearly show the interest that has been added, starting and finishing balances etc, so it should of been very easy to see how much interest is being added per month and how much your monthly payments were.


I would try the PPI claim thing on all your debts, you may get some back.


Good lucks

Rosemary7391

Tryingtocleardebt wrote: »

I'm in a fortunate position now where I have my own business and can pay off £10k in one go, and hopefully the rest next month.
With them 'giving me' 3 months interest free I won't add any more interest before it's paid off.

It just seems so unfair that I have paid so much to this company and have nothing to show for it.

Another question, my husband says to pay off the highest APR first but with this situation I want to just get rid of the Halifax card as literally nothing is going off the debt each month.
Would you do the same, or pay off the card with APR of 20.79%, even though £30 a month of the £110 monthly payment is actually paying off the debt?

I would not cost myself money just to spite a bank that didn't explain something to my satisfaction. Pay off the highest APR debt first. You can always pay more than the minimum to pay off the debt faster!

MallyGirl

Tryingtocleardebt wrote: »

Another question, my husband says to pay off the highest APR first but with this situation I want to just get rid of the Halifax card as literally nothing is going off the debt each month.
Would you do the same, or pay off the card with APR of 20.79%, even though £30 a month of the £110 monthly payment is actually paying off the debt?

different cards calculate their minimum payment differently and this may be what you are seeing. Some are 1% of balance, some are 2%, I think Sainsburys are 2.25%. The difference you might see, although you feel like you are doing the same thing and making the minimum payments across the board, would be significant.

PeacefulWaters

Pay more debt reduces faster.

Try it.

Shakin_Steve

Wow! I'm stunned. I mean, I know how it all works, but those figures should be a warning to everyone. I hope you get yourself clear of debt soon, it will feel like the weight of the world off your shoulders.

chattychappy

Tryingtocleardebt wrote: »

having an ex leave suddenly and me having to pay all the bills and mortgage on my own etc.

OP you keep saying the situation is "unfair" and refer to the something in the T+Cs/small print etc that allows them to do this.

The reality is, all those statements would have shown the situation. You would have seen an opening balance, amount of interest, amount of repayment and closing balance. Sure, if there was something like PPI on there, you've got grounds to complain because in many cases PPI was sold illegally. The sort of APRs that CCs charge are legal.

You write "Please don't comment saying I 'should have known'", but as you keep repeating about the unfairness, I'm going to be the one that says what you asked people not to say. Effectively you've been renting your debt over the past years - the rental being your interest. And you should have known from your statements.

However, at the same time, it seems you've kept up with your mortgage payments. No doubt the interest there is much lower. How much has your house appreciated since 2012? It's swings and roundabouts.

You say you now run your own business. Bear in mind that for business, much of the consumer protection you might be used to doesn't apply b2b. You really must be on top of all financial matters.

Get a 0% BT card if you can. Whilst it's a good thing to pay down the debt with any spare cash you have, don't run yourself completely short of cashflow - keep a buffer. DDs are awful because they make it easy for people just to set up one to pay just the minimum. As they are automatic, people can "never get around" to checking the statements. Even if you have a bad month, still pay at least £1 more than the minimum. That avoids the "minimum payment" marker on the credit files.

Good luck. 8 years ago I was younger too!