Not sure what to do

ninty04

Hello there.

I have had a HSBC CC for nearly 3 years now and after the first 12 months I started paying interest on top of the 3% minimum every month, which I'm not too worried about, or at least I wasn't.
I've never fully paid off the card since I've had it, but now I face a 50/50 chance of losing my job at the end of October 2007 (company reasons, not due to my fault) and the card has only just gone over the limit (£4500 limit + £18 over). I know I may lose my job, and have started looking for another replacement job.

I'm just lost as to what I should do to erase this debt on my card as I'm not experienced when it comes to debt. Which would be more suitable for my situation, another credit card to transfer some of the debt as I know I wouldn't be able to get a £5000 CC straight up with a new CC firm as I haven't seen any that exist. Or would a loan be more suited?
I've always had a good credit rating as I have always been on time with the 3% every month.

I'm a little worried because I don't want to have to start paying huge sums of money every month just to stay on top. What do you think I should do?

Any help is greatly appreciated, and I know I should have been more wise with my spending.

Halons

Could you try getting a couple of 0% interest cards and putting half the debt on each one? I'm not sure if you could but it's worth looking into.

Loans add interest so you'd end up with even more debt and you might not be able to meet the monthly payments if you where out of work for a couple of months while you got a new job. At least with a couple of 0% interest cards, you'd be less obliged to pay a lot of money off the cards for the first 1-2 months.

CLAPTON

The first thing you need to do is to stop spending, the second thing is to stop spending and the third thing you need to do is to stop spending...no comfort meals out, no comfort treats, just stop all non essential spending.

The fact that the CC debt has ben growing means you were anyway spending more than your income and even more so you must stop spending now.

Next post up an SOA so we can help you on the spending side.


next : what are the prospects of getting a new job and at what salary?

on the debt front ..what is the APR of the CC..is that your only debt?
While moving debt to a 0% card is always good news it won't necessarily reduce your monthly outgoings which is probably you mosy urgent need as this time.

GeorgeUK

I'd also get a credit report.
http://www.moneysavingexpert.com/banking/credit-rating-credit-score

You can get one free from experian - sign up to them, get your report, then cancel after you have seen it and anyone who has asked to see your credit history. As long as you don't have more than about 3 credit checks in a 6 month period, you should probably get what you need. (I wouldn't bother paying the extra to see your credit score - diferent places have varying calculation methods for that)

I get about £15k pa wages and got the 0% cards listed below. Hopefully you should be able to do the same, but heed Clapton's advice about the monthly outgoings. Different cards require a % to be paid back every month, so you need to make sure you can cover this or you may lose the 0% interest.

There may be other areas we can help you, so a SoA will help.
http://forums.moneysavingexpert.com/showthread.html?t=107280

ninty04

Ok, here's my SOA as best as I can get.

Weekly Incomings:

My salary - £250 - £400 p/w (shift dependant as I work weekends sometimes too.

Total - £1000 - £1200 approx.

This is until I may lose my job at the end of October 2007 (50/50 chance). Then I wont have any income until I get a new job. Wgich I'm searching for at the moment.

Monthly Outgoings:

Well at the moment I am living at home with my parents.

HSBC CC - £150
CC Insurance - £10 approx. (a bit less I think)
Interest on CC - £40 approx.

Mortgage/Rent - £400
Mobile Phone 1 - £45
Mobile Phone 2 - £45
Phone (Landline) - £11
Food - £280 approx.
Internet - £35
Website Domain - £5


Total: £1,021.00 approximately

That is about all I actually spend during the month. There may be a few tiny little things that I can't remember off-hand.

I have an agreement going with my sister, as in if I lose my job I will be able to take up temporary residence at her house at the cost of helping out with the food, plus maybe a little extra for rent. Just until I get my new job (if I haven't already got one by then) and also until I sort out my finances a bit better.

I'm not an impulse spender, even though it may sound like I am. I only spend money if I know I can afford to pay it back in the near future, but the trouble is, is that sometimes I "put off" paying back a little extra to the credit card, sometimes for a few weeks, so it builds up.
I don't spend a lot of money on myself, very little in fact, but as I said, I just don't pay what I should pay when I've got the chance, and now that I'm threatened with losing my job I'm in a little pickle as I wont be able to cover the payments unless I find an alternative form of employment soon.

Thanks again for any help that you give.

d0r0thy

ninty04 wrote: »

...Which would be more suitable for my situation, another credit card to transfer some of the debt as I know I wouldn't be able to get a £5000 CC straight up with a new CC firm as I haven't seen any that exist. Or would a loan be more suited?...

Ninty04, May I make one suggestion if you get desperate- you would have no problem getting a Debenhams credit card. The limit is 5000 as standard and you receive 0% for 6 months (3% bt fee). Best to apply in store and take a few bills for ID, acceptance is within a minute & very few people are declined. It would provide you with a little breathing space, best of luck!

Bloke_with_a_simple_life

ninty04 wrote: »

Ok, here's my SOA as best as I can get.

Weekly Incomings:

My salary - £250 - £400 p/w (shift dependant as I work weekends sometimes too.

Total - £1000 - £1200 approx.

This is until I may lose my job at the end of October 2007 (50/50 chance). Then I wont have any income until I get a new job. Wgich I'm searching for at the moment.

Monthly Outgoings:

Well at the moment I am living at home with my parents.

HSBC CC - £150
CC Insurance - £10 approx. (a bit less I think)
Interest on CC - £40 approx.

Mortgage/Rent - £400
Mobile Phone 1 - £45
Mobile Phone 2 - £45
Phone (Landline) - £11
Food - £280 approx.
Internet - £35
Website Domain - £5


Total: £1,021.00 approximately

That is about all I actually spend during the month. There may be a few tiny little things that I can't remember off-hand.

I have an agreement going with my sister, as in if I lose my job I will be able to take up temporary residence at her house at the cost of helping out with the food, plus maybe a little extra for rent. Just until I get my new job (if I haven't already got one by then) and also until I sort out my finances a bit better.

I'm not an impulse spender, even though it may sound like I am. I only spend money if I know I can afford to pay it back in the near future, but the trouble is, is that sometimes I "put off" paying back a little extra to the credit card, sometimes for a few weeks, so it builds up.
I don't spend a lot of money on myself, very little in fact, but as I said, I just don't pay what I should pay when I've got the chance, and now that I'm threatened with losing my job I'm in a little pickle as I wont be able to cover the payments unless I find an alternative form of employment soon.

Thanks again for any help that you give.

Is the "CC Insurance - £10 approx. (a bit less I think)" PPI cover that pays out if you are unemployed? if so... this may be a saviour to help you out in your hour of need.

However, it does not address the fact you won't have money to spend on other luxuries such as the 2 mobile phones and £280 per month in food and the website domain. CAncel at least one mobile, and get the other one on a smaller contract... cut back on phoning and texting people...

Eat less - eat more economically (£280 for one person is a big food bill..) - no meals out/carry outs - no new clothes or luxuries - no going out etc etc.

Get control of your spending now - don't wait until you are unemplyed. YOU must be spending more than £1200 per month on your card for the debt it to grow to over £4000.

Go onto the Debt Free Wannabee board for more help.. get some good advice on cutting back your spending there.

http://forums.moneysavingexpert.com/forumdisplay.html?f=76

Good luck.

Bloke_with_a_simple_life

d0r0thy wrote: »

Ninty04, May I make one suggestion if you get desperate- you would have no problem getting a Debenhams credit card. The limit is 5000 as standard and you receive 0% for 6 months (3% bt fee). Best to apply in store and take a few bills for ID, acceptance is within a minute & very few people are declined. It would provide you with a little breathing space, best of luck!

BE CAREFUL...

IF yuo have PPI on your current card, this may cover the minimum repayments for 12 months... if yuo get a new card and go unemplyed, you won't be covered by the any new card and therefore YOU will need to make the minimum payment....

ninty04

ninty04 wrote: »

Mobile Phone 1 - £45
Mobile Phone 2 - £45

These both NEED to be paid as they're both contracts with over 9months left on each. If I were to cancel them now then I'd get charged a disconnection fee, plus the remaining balance of the contract, which would be more than I could cope with right now.

Bloke_with_a_simple_life wrote:

Is the "CC Insurance - £10 approx. (a bit less I think)" PPI cover that pays out if you are unemployed? if so... this may be a saviour to help you out in your hour of need.

Yes this is the insurance I took out when I had the card in the the unlikely (or more so likely) event that I were to suddenly become unemployed and that I would be covered for up to 12 months until I found another job, but I'll have to call may bank asap to tell them I've been made redundant.

Bloke_with_a_simple_life wrote:

However, it does not address the fact you won't have money to spend on other luxuries such as the 2 mobile phones and £280 per month in food and the website domain. CAncel at least one mobile, and get the other one on a smaller contract... cut back on phoning and texting people...

Eat less - eat more economically (£280 for one person is a big food bill..) - no meals out/carry outs - no new clothes or luxuries - no going out etc etc.

As I said above, these mobile MUST be paid every month, and I think it would work out cheaper paying them month by month rather than cancelling the contract/s and having to rake out loads just to pay for all the additional costs that are involved with closing the contract/s early.

d0r0thy wrote:

Ninty04, May I make one suggestion if you get desperate- you would have no problem getting a Debenhams credit card. The limit is 5000 as standard and you receive 0% for 6 months (3% bt fee). Best to apply in store and take a few bills for ID, acceptance is within a minute & very few people are declined. It would provide you with a little breathing space, best of luck!

I'll definately be looking into that, but I might not need it as I have PPI on my credit card for 12 months after unemployment. So I might be able to get around this without having to get another card after all. I completely forgot I took out PPI when I had the CC.

CLAPTON

You say you are living with parents but are paying 400 rent .. is that right?

If you have PPI on the CC then I wouldn't move any money to a new card because they will say you knew you were going to be made redundant and won't pay out.

250 per month on food is enormous for one person.. think about 100 instead.

Why do you have two mobile phones? Can you ask them to downgrade the contracts so they are a bit cheaper?.. In the longer term and once the contracts are up cancel one completely and spend a lot less on the other.

35 for broadband is expensive too .. lots of offers around 15-20 per month.

In reality your SOA seems to lots of things missing so its best to think about all the things you really spend... any travel costs, presents/xmas, travel to work, lunches/coffess, any clothes

bengal-stripe

ninty04 wrote: »

I have had a HSBC CC for nearly 3 years now...I've never fully paid off the card since I've had it,...and the card has only just gone over the limit (£4500 limit + £18 over).

ninty04 wrote: »

I'm not an impulse spender, even though it may sound like I am. I only spend money if I know I can afford to pay it back in the near future, but the trouble is, is that sometimes I "put off" paying back a little extra to the credit card, sometimes for a few weeks, so it builds up.

In just under three years, you've clocked up £4500 on your CC, that is £125 per month of someone else's money. Obviously you cannot pay that money back.

Paying just the minimum on a card, means you cannot afford the debt. Don't kid yourself. You have spent money, that you cannot pay back in the near future (even if you do not loose your job).