Calling Credit Card companies before I default Question

John28337398

Hi I have a lot of Credit Card debt around £47000. Most is on 0% deals and I can make the minimum payments. However 2 deals have just ended and the interest is just under £400 per month. I can't afford this for any length of time.

I have a Barclaycard with 5k available, but no balance transfer offers at the moment so can't shift any of it there. If I could it would be ok as it would free up the other two cards and I could then shift it to their offers.

The two cards I am now paying interest on are from Virgin and Halifax. I have called both to try and negotiate a better interest deal but both say they don't do this.

My question is if I call them to say I will have difficulty paying them, will this put a black mark against me getting future 0% offers from them even if I still make payments?

Also I do call them to say I'm going to have difficulty making the payments with such high interest are they likely to offer to do anything such as freeze interest etc and would this reflect on my credit file?

Thanks.

Westminster

If you cannot make your contractual minimum payments (for whatever reason - and even if this is with agreement of the creditor) then this will be accurately reflected on your credit file and will certainly be detrimental.

From what you have posted, it seems like you have nearly run out of hands to keep juggling all these debts without dropping a ball.

My advice would be to contact a debt charity such as StepChange who can go through your full financial situation and recommend the best course of action.

You could also post a full SOA on here as you may find some advice on where you could make additional cuts to your outgoings to try to keep your head above water if you really want / need to keep your credit file clean.

StopIt

If you make any changes to your contracted payments, that will end up on your credit file.


Telling them you're in financial bother itself isn't the trigger for anything though.


Any Arrangements like freezing interest will likely show up as Arrangement to Pay markers on your file. These will stay 6 years after the debt is cleared, unless if the account is defaulted later, then it's 6 years from then. These markers will make your chances of getting any more 0% deals near 0.


You're unlikely to get interest reductions, outside of the grace periods offered by the lenders. Once they're up you'll have to resume payments or default.


This juggling act isn't going to work unless if you've got the means to pay after the grace periods, and yes, that includes the interest that you'll have to pay.


I'm going to be honest here, unless if you're on £70k+, you're on a road to nothing here. You've got a very high credit card balance and you're not going to get 0% deals forever. You'll need to deal with this debt one way or the other.


As stated, post up an SOA and be prepared to speak to a debt charity like Stepchange for assistance.

sourcrates

Hi,

Shifting debt around is only a temporary measure, and is usually an indication you may be in financial trouble.

You need to stop borrowing, start living within your means, which involves working out a budget you can stick too, then working out which option will be best for dealing with the 47k of debt you have accrued.

An SOA will tell us the answer to that question, only then can you start getting rid of this debt effectively.

SOA calculator here :

http://www.stoozing.com/calculator/soa.php

John28337398

Thanks for the replies and advice. I'll produce a SOA and contact Stepchange. I'd rather keep my credit file clean and not default but its getting harder. The 47k is a couple of thousand higher than my pretax salary so I have a reasonable salary so would like to keep paying if I could.

Re 'From what you have posted, it seems like you have nearly run out of hands to keep juggling all these debts without dropping a ball.' Yep this is pretty much where I'm at now.

Thanks again.

Westminster

Well hopefully this is your lightbulb moment and you have enough time to take positive action to get on top of this while maintaining your credit file.