Putting a stop to this now

Newstartforusnow

We have debt it £4472.02 on a 0% credit card and while this may not seem a lot to some - it’s really concerning me now and I want to nip this in the bud before we end up in a worse situation.

We have this terrible habit of running up a card to £3-4K, moving it to a 0% card, paying it down a bit then running it back up ... repeat cycle. We drastically need to change our habits.

There’s a possibility we might move soon and it’s amazing how that ‘small’ amount of debt can reduce the amount lenders are willing to give you.

At the same time I want to try and build up a fund so that the things we’d normally ‘stick on a card’ can be paid for outright. I feel there’s no point paying off the card to be left with nothing then needing to use it again which is what we’ve been doing till now.

We use a Monzo account for weekly spends and I’ve set up a pot that rounds all transactions up - every week I’m going to transfer what’s in here (a very small amount obviously) onto the card. Ditto any left over money from that week not spent.

If anyone has any other little tips I’d really appreciate hearing them.

There are 19 months left on the 0% period so I’m going to calculate the lowest possibly payment needed monthly to get that paid off in time. It’s currently set at £105 but I calculated that when it had a different amount on it.

FootyFanDan

Hey! Welcome to the forum.

Well done on wanting to tackle this and whilst the amount is low the fact it is concerning you and the cycle you are in is on constant loop is a good reason to fix it.

Like you I did not have a huge amount of debt but it was enough payments to make me not be able to do nice things and kept me up many many nights. It took me literally having to put £3.50 in my car to get me to work on a night shift for me to finally say enough was enough. I had massive electric debt/council tax debt and many others and just buried my head hoping it would go away...it hasn't, but 6 months into fixing this the electric debt is gone, council tax debt is gone, ccjs paid off

Sorry for the ramble lol, but just wanted to show just how things can change and a lot of that as come from viewing these diaries and picking up tips. One tip that many will give is to do a SOA (a true one of all outgoings and incoming) even if you don't post here it gives you a picture of where money is leaking...its such an eyeopener. Many people on here can look over SOA and provide tips where to cut and save

Anyhow I wish you all the luck in the world on this journey...you can do this and will do this.

enthusiasticsaver

To clear that current balance in 19 months is £235.37 per month so I am guessing the balance is now a lot higher than when you calculated that £105?

The normal advice I would give you are already thinking of doing.

Save an emergency fund because as you say if you have no fall back plan to pay for unexpected spends it is too tempting to use a credit card. You have to get out of that habit.

Budget. The Monzo account is a good start. A lot of people find that works for them.

Save for annual expenses, car maintenance, vet bills if you have pets, presents for xmas and birthdays etc and holidays if you take them.

Top of my list would be do a soa and keep a spending diary.

Good luck.

Newstartforusnow

You’re absolutely right. I think what I did was calculate the payments needed to clear the balance when I originally transferred it, then used the card. I’d always planned to pay more per month so didn’t worry too much about what the payment was set as but as is often the case with these things that never materialised.

Am going to change the payment to the bare minimum needed to clear it by the 0% end date and pay as much extra as I can whether that’s £5 or £500 per month.

Made a payment of £5 today which was leftover money on the Monza card last week.

Newstartforusnow

Made a spreadsheet today to keep a log of our spending - Monza is great but would be even better if you could see exactly what you’d bought in each shop!

It’s funny because a huge part of my job is analysing bank statements but I’ve never done it for my own spending.

I think it will be really interesting after a month or so to get a clear picture of our spending.

Waiting on a £7ish payout from Topcashback to pay towards my credit card

Newstartforusnow

My partner isn’t happy because I mentioned I felt his spend on lunches was quite excessive this week. He thinks because he works a lot of hours, he’s entitled to it.

Credit card now standing at £4449.11.

We are away for a long weekend tomorrow and will probably spend a fair bit but I really hope we can stick to the budget I’ve assigned for the weekend.

enthusiasticsaver

Hmm sounds like your partner has bought into the entitled lifestyle. If you can afford expensive lunches out often fine but if he is using the credit card he can't afford it.

Analysing spends is great and really useful as are savings pots/accounts/envelopes. The only way to stay out of debt is to budget so it sounds as if you haven't done that until now?

Newstartforusnow

We’ve been budgeting for a year or so with my partners weekly wage but always with the knowledge that it ‘didn’t matter’ if we went over it because my salary would come in at the end of the month and sort that out ... until it gets to the point I might only have £200/300 left of my salary after paying us back if that makes sense?

So I really want to stick to the budget as if it’s the only money we have. A set amount every week that we cannot go over - to the point I’m having toast for my tea tonight because I don’t want to dip into any other money. I think I will struggle to get that concept into his head though.

My partner thinks it’s ok that he overspent the budget today because he transferred money over from his account to cover it but to me that’s still wrong in principle.

Credit card balance is really made up of holidays, home improvements etc rather than needing to use it in Tesco for dinner type of thing.

Olddognewtricks

Congratulations on starting to tackle something that is obviously quite daunting. As someone new to this site I've found that being able to even just have someone else's opinion on things is quite helpful.
From my point of view the amount doesn't matter. If it's causing you stress and worry then you need to deal with it.

Newstartforusnow

Have overspent a fair bit on a weekend away with family but have been pretty good this month up until now and will get right back on track tomorrow when we’re home. Will also make sure we do a big food shop this week and don’t spend too much on that.

enthusiasticsaver

Newstartforusnow wrote: »

Credit card balance is really made up of holidays, home improvements etc rather than needing to use it in Tesco for dinner type of thing.

The best way of avoiding that is saving in pots for holidays and home improvements. As a last resort a 0% card can be used but ideally a monthly direct debit set up to repay within the deal period and no further spending on the card. That is always the system we have used and worked for us.

If a credit card is used to buy everyday stuff like groceries that is essentially borrowing from next months money so that might dissuade you and your husband if you think of it like that.