First steps to a debt free future

Liliger

Hello everyone,

I found this forum about two weeks ago and have visited every day since. Not having managed to tackle my credit card debts, let's see if writing a diary will help.

These are the current figures:

CC1 - £7240.75 23.7% (interest last month was £133.74) Min payment is £205.93
CC2 - £3372.27 15.95% (interest £36.35). 0% ended Sep18. Min payment is £70.07
CC3 - £1759.19 18.94% increasing to 23% from Dec19 (interest £28.54). 0% ended Mar19. Min payment is £47.13
CC4 - £2779.58 0% until Mar20. Min payment £69.49

Total - £15151.79

Total min payments £392.62

Payments to CC1 have varied but I always try to pay more than the minimum. The big problem has been that I have still spent money on the card. I think seeing the figures written down like this will help stop me doing that and I have now taken that card out of my purse. I don't know the card number in my head which I used to with the earlier version. The only charges I would expect on there now are for my ebay invoice which was £24 this month.

CC2 I try and pay £100 per month.
CC3 I try and pay £100 per month.
CC4 I am making minimum payments. Since this month, I am going to try and save the difference between MP and £100 so I have something for an extra payment towards the end of the 0% rate.

I don't think I have a chance of getting another 0% card with a decent interest free period on it at the moment. I am considering paying off CC2 as it has current transfer offers on it (0% for 9 months, 3% BT fee or 4.9% for 12 months with 0% BT fee) and then moving £3300 from CC1 as the interest payments on that card are really hampering my efforts. It hurts to think how many 000s of the £15k have been added in interest.

I have made some reductions to the available balances on these cards when I can as once I get out of this situation, I don't want there to be any temptation to end up in a similar situation. During the years when I thought it was all manageable, I had a £15k limit on CC1. I never asked for that, and I know I could have declined the bank's offer to increase it. I honestly never thought I would come anywhere close to that figure and yet, here I am. CC3 and CC4 were never for purchases, I got those for the transfer offers. This mess is from just two cards.


I am living at home and pay £300 per month, my mobile is PAYG and costs £10 a month. There are no payments for music, tv, gym, things I don't use.

One more thing which does add some urgency to the situation, I was made redundant at the end of June and am currently unemployed.

I am getting JSA, although there was no payment today for reason unknown and I did get redundancy pay. My EF is £7000.

Obviously, the priority is to find another job. The work situation is depressing and I just want to sort that asap. I think this is going to be a diary about finding a job at the start.

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ThatKiss

Hi Liliger and happy new thread!

Normally with the level of debts you have, the first feedback would usually be to use (some of) your emergency fund to pay some of the debt, but given your employment situation, I'd keep the emergency fund in place until you're working again.

Your largest debt is also attracting the most interest, so at this stage I'd suggest, rather than trying to pay £100/month off each of the other cards, to pay the minimums on these and put any of that extra money towards the largest first, as this will lower the interest going out.

Given your job situation, would your parents be amenable to reducing/forgoing your rent to them until you're working again? I know you probably want to pay your way, but parents are usually keen to help where they can so it's worth asking.

I'm sure some of the more regular posters will be along with some further feedback shortly, but good luck!

Liliger

Hello ThatKiss,



Thank you for your reply. I felt more nervous coming back to this than I did about writing the first post. Not paying towards living costs is not an option, plus I am mindful of the fact that I probably don't pay enough in the first place.


If I paid off one of the cards now, I would have about 5 months in my EF. If I pay the minimum amounts I will have a bit longer but it's more overall interest every month.



The 0% card is until March21, my mistake.


For the last 18 months before my job finished, I knew that I had come to the end of the road there so, being made redundant is forcing me to move on, something that I need. The difficult bit about it is that going to work was my interaction with the world, and it's gone overnight. Partly for financial reasons, sometimes I stay home for days at a time (I think 5 is the record). I know this isn't doing me any good but it happens. I'm quite good at NSDs right now.


I have an interview this week and have found some more jobs to apply for today. Tonight's task is to wrap the ebay items that have sold today.

enthusiasticsaver

I would use your EF to repay as much of CC1 as you can as you are living at home. The interest each month is huge. Cut up the cards too so you are not tempted to spend on them.

FootyFanDan

Hey,

I just wanted to say good luck on your journey, the job situation does make it harder at the moment. I do agree with enthusiastic the interest is crippling and I would possibly use some of the emergancy fund to clear as much as you think is manageable

Cheering you on, you will do this

beanielou

Another vote to use the CC to pay off CC1.

Liliger

I am attempting to move the debts around on the credit cards to get lower interest rates. I will update that once it is done.

The last few days the £s just fell in to my account.

About £60 after fees from Ebay.
£200 - part of my redudancy pay. I can't talk about this but it looks like a 'don't ask, don't get' situation which is beyond words.
£160 - refund from HMRC for tax paid on a PPI payment. Thank you Martin Lewis for writing about this.

They are decent amounts but, as I am still looking for a job, I have to be careful. Hopefully some good news about this soon.

No JSA arrived. I wish it was possible to have an account online with them. All I can see is it listed on my HMRC details online. I know I should call but I haven't done it yet. I didn't get my redundancy pay until 2 months (and the last bit 3 months) after my job ended which was out of my control. I wonder if they think I have made a fraudulent claim.

Liliger

First card shuffle has been done, will attempt the next tomorrow and post revised figures.

Decision to be made about tomorrow. A friend is visiting from abroad. He hasn't come just to see me.

I am trying not to spend more than £20 a week and have already spent £6 yesterday.

Train ticket to the city is £7.30 and we are supposed to be meeting for lunch which will be around £15. The bus might be some pence cheaper but will probably make me feel travel sick as I rarely go on long bus journeys now. This is exactly the kind of situation where I would have put lunch on my credit card in the past, even if I had cash for it. I won't be doing that. However, neither do I want to go over the week's budget on a lunch with someone I haven't heard from for more than a year. I am waiting for some money from ebay and some cash from surveys but, I know I will find it disappointing to go over budget in the first week.

Conversely, being unemployed is lonely. My diary is not overflowing with social events. Once I get over being cross with his lack of contact, I will probably enjoy seeing him. So may people write that being too strict means they end up breaking their own budget rules.

Liliger

I read other diaries most days but don't come back to my own. So, I met my friend and he paid for lunch as he felt sorry for me. It was good to see him and I sent a thank you message after he left and have not heard from him again.

I used some of my redundancy to pay off one of the cards. I was then able to move some of the biggest balance to a lower rate of 4.9% for 12 months. Current totals are:

CC1 £3749 - Jan payment already made.
CC2 £3156.62
CC3 £1548 - Dec statement due
CC4 £2571.28

Current total £11024.90

I am not going to think about rounding it down for the New Year as it will increase with the last Dec statement.
The total is £4126.89 lower than when I started. I haven't used my card since then, until last week when I bought something that wasn't essential for £38. I still want to buy things but am trying to think about it first.

I did have a temporary job in a supermarket, however, they didn't want me to stay so I start 2020 without a job. When I get the last pay, it will have paid my Dec costs. It's not very positive that I wasn't good enough to stay but neither was it a long term solution - neither the team manager nor his deputy actually told me it was my last shift, despite being stood there, I had to see from the rota. Also, it was a min wage job, yes, it would have gone up but, it doesn't make me think well of the company.

So, I'm really hoping that a suitable opportunity comes along early next year. I managed the grand total of two interviews in 5 months this year, both for supermarkets, which was a temporary help, nothing more.

Jox

Good luck with the job search, I hope you find something early in the new year, keep positive