In the black for once in a long time, what to do??

AdamPaton

CakeCrusader wrote: »

It might be wise to write a list of your income and outgoings before you do anything else, and then look at where you can make savings. Paying the minimum balance on a credit card is never a good idea as it will take longer to clear it (and all you're paying off is mostly the interest).

Are you able to save up a month's worth of credit card payment? This way if the date is before your payday, you have the payment and you can just save the next one (if this makes sense). If you're constantly paying late your credit file may show this, so you could have problems doing a balance transfer to a cheaper card, but I'd avoid a sub prime card as these have a whopping interest rate (and it won't help if you're paying off the minimum balance as you'll have problems clearing your outstanding balance). Most credit card companies do allow you to change your payment date by the way, but they will add additional interest onto the first one to account for the extra days. Just ask them.

I wouldn't apply for a new card until you've got into a routine of paying your bills on time as being stuck with a credit card which is charging you 40/50% interest isn't an easy ideal.

Thats what i thought crusader thank you for that. I will try that out with the saving a month ahead if i can.

AdamPaton

Fireflyaway wrote: »

I'd keep the existing card and make better attempts to pay it off. Swapping to a 0% isn't much use if you miss payments / make them late, its just moving the debt about and having more accounts on your file. Swapping cards could make you more complacent and more inclined to relax instead of identifying some savings and attacking the debt with more intensity.

Yes i hear you Fire flyaway and that's a good point about the possibility of relaxing but i wouldn't do that as i know its high time I clear this debt.
I've been making payments late because of how high the minimum has been so switching to 0% would allow me to have at least a year to pay it off where some months i might not have the extra cash to pay it and others i have double with over time.

I i will definitely be attacking my debt with more intensity! I like that line thank you.

binaryuniverse

AdamPaton wrote: »

I have done this before but as the payment days shift through out the years with 28-31 days in a month it slides forwards and back.
I'm not sure if they will be happy about that but i will call and ask anyway. Thank you for the suggestion.

Why do you think a credit card company wouldn't be happy with moving a payment date?
Move the payment dates so that they are paid out roughly a week after you get paid, so that the moving payment date shouldn't be an issue. If it really does fluctuate, so that it can be any day of the month, then you need to set about building a 'cushion' (a self-made overdraft, on top of your overdraft) so that you can always cover it.

Set up a minimum payment direct debit on all your cards. That way you'll never miss a payment.

CakeCrusader

Minimum payment direct debits are not a good idea as it will take you a lot longer to clear the balance. It's better to set up a standing order, this way you can make the payment higher than the minimum balance and you can keep it the same every month, so you'll clear it faster. Direct Debits change every month and you don't have any control over how much you're paying.

binaryuniverse

But a minimum payment DD does ensure he doesn't miss a payment. Which is what I'm saying. He can then top that up as much as he wants.

CakeCrusader

You don't miss a payment with a standing order providing you set it up to leave your account on the same day, but you have the ability to pay as much as you want to (as long as it's above the minimum). A DD reduces slightly every month, so it takes you longer to clear the balance. If you have a standing order set up for the same amount every month you clear the balance faster and you pay less interest overall. I have mine set up to pay twice the minimum payment and it goes out 4/5 days before the payment due date (I always pay on the same day and it goes out just after the statement has been produced) so I pay less interest as it's calculated per day.

phillw

CakeCrusader wrote: »

You don't miss a payment with a standing order providing you set it up to leave your account on the same day, but you have the ability to pay as much as you want to (as long as it's above the minimum).

The due date on my CC is never the same day of the month so setting up a standing order to go out on that date would not be really helpful. You are much better off having a DD paying the minimum payment and then overpaying manually or with a standing order. The cost of missing a minimum payment is huge and if the DD fails through no fault of your own then the charges can easily be reversed. If it's because the standing order didn't go through then it's much harder.

The cost of missing a CC payment may even be larger than the cost of going into your overdraft.

I would look at trying to switch as much of the credit card debt from 20+% to 0% as possible. Setup minimum payment DD on all your CC and manually overpay as much as you can afford every month from the debt with the highest %

CakeCrusader

phillw wrote: »

The due date on my CC is never the same day of the month so setting up a standing order to go out on that date would not be really helpful. You are much better off having a DD paying the minimum payment and then overpaying manually or with a standing order. The cost of missing a minimum payment is huge and if the DD fails through no fault of your own then the charges can easily be reversed. If it's because the standing order didn't go through then it's much harder.

The cost of missing a CC payment may even be larger than the cost of going into your overdraft.

I would look at trying to switch as much of the credit card debt from 20+% to 0% as possible. Setup minimum payment DD on all your CC and manually overpay as much as you can afford every month from the debt with the highest %

Which is why you set the Standing Order to leave your account 4/5 days early and you keep an eye on it. I've had one set up for years and have never had a late payment (touch wood).

jamie_02

Would agree with the DD method, not the SO method. DDs can be set for a specific amount, the minimum or the full amount, but the risk (albeit minimal) sits with the collecting organisation, not you.

m_c

I usually set up a Direct Debit for the minimum amount, and then simple transfer extra money if I want to.
That way at least the minimum amount gets paid on time (as Jamie says in the last post, this puts the onus is on the credit card company to collect the money on the right date), and gives me more flexibility in the total I pay each month.


Moving statement dates to a couple weeks after your pay day is usually wise, as then the payment date should be about a week after pay day.