Simplifying my finances - help/thoughts please

njm42

Hello all,

I am a keen credit card user and we have used them to gain airmiles/hotel points and also for 0% stoozing. We were then in a position to buy a house, so the 0% stoozed helped with that, and can no longer be used to immediately repay the debt.

Everything should have worked to plan, and the 0% credit cards would have been cleared within the next 4 years. However my wife and I are now in the process of separating, so finances for the next period of time could get a bit messy! I want to try and simplify things as much as possible without causing any potential problems for myself further down the line.... the situation in relation to the house is complicated as there is limited equity, a big early repayment charge and rental options locally are expensive. Although largely in my name, this debt is all shared - so figures are likely to change depending on how/when everything else gets sorted out.

According to my MSE credit report, I have 13 credit cards at the moment:
- 4 cards on 0% deals in my name, which I intend to keep until the end of the term.
- 3 cards that I will intend to use for daily spending to earn a variety of points/keep existing ones active (and pay off in full each month).
- another one which I'd like to keep as it has 0.5% cashback and no fees for foreign spending (however I value the points I can earn elsewhere more than this, and if going abroad am more likely to use Revolut/similar at the moment)
- another one which has a £9k credit limit which often has a Balance Transfer option linked to it (not guaranteed, and not a market leading fee/time horizon - but my thought is that this provides options, and better to pay 3% for a 12 month deferral, rather than finding that I end up carrying a debt on a higher interest credit card)
- that then leaves another 4 which I am intending to cancel shortly

My total credit limit at the moment is approx 2x salary, and the balances on 0% are around 50% of my salary. I know that credit utilisation is often key in affordability, if I do the above then the 0% debt will take me to about 30% utilisation. 

From an outside perspective, does the above make sense? Or should I only keep the 0% cards and 1/2 others for daily use (however my credit utilisation figure will then be very high)? I know that closing cards down can have an impact on your credit score - is it best just to make all the changes in one go or should I try to spread these out a bit more?

2e0arr

why didnt you ask for advice before you applied for these cards ?

Tildaplum

What are your objectives - when you say simplify what do you mean? Do you mean reduce the number of credit cards from 13 to 12 or do you mean something else

if it were me I'd be looking to to reduce my debt as much as possible

njm42

We stretched ourselves to buy the house but were within our means with a clear plan to clear the debt within a 4 year period... life has changed since, and with 2 households to run it will be trickier - still possible, but we will need to extend the repayment period somewhat. Any debt that isn't at 0% gets paid off monthly.

I am looking to reduce the number of cards from 13 to 9, and generally trying to make my finances a bit more straightforward.... for example I also had several current accounts and was shifting £1k around to get higher rates of interest/reward fees - but this, combined with juggling some of the CC payments meant that I have been spending far too much time/effort managing this.

I guess the main question is this - should I try and do everything at once, take the hit on my credit score with all of the changes and ride it out? Or shall I make a change every couple of months, moving in the right direction but not a sudden hit? Credit score is comfortably in the "good" range but the "affordability indicators" are low.

Willing2Learn

njm42 said:

I am looking to reduce the number of cards from 13 to 9, and generally trying to make my finances a bit more straightforward.... for example I also had several current accounts and was shifting £1k around to get higher rates of interest/reward fees - but this, combined with juggling some of the CC payments meant that I have been spending far too much time/effort managing this.

I guess the main question is this - should I try and do everything at once, take the hit on my credit score with all of the changes and ride it out? Or shall I make a change every couple of months, moving in the right direction but not a sudden hit? Credit score is comfortably in the "good" range but the "affordability indicators" are low.

You do realise that a typical lender does not use your 'credit score'?  So yes, although your 'credit score' will drop, it would not impact on how your are viewed when a creditor checks your credit file(s).  On that basis, I would do everything all at once.  Get it over and done with 

coachman12

Willing2Learn said:

njm42 said:

I am looking to reduce the number of cards from 13 to 9, and generally trying to make my finances a bit more straightforward.... for example I also had several current accounts and was shifting £1k around to get higher rates of interest/reward fees - but this, combined with juggling some of the CC payments meant that I have been spending far too much time/effort managing this.

I guess the main question is this - should I try and do everything at once, take the hit on my credit score with all of the changes and ride it out? Or shall I make a change every couple of months, moving in the right direction but not a sudden hit? Credit score is comfortably in the "good" range but the "affordability indicators" are low.

You do realise that a typical lender does not use your 'credit score'?  So yes, although your 'credit score' will drop, it would not impact on how your are viewed when a creditor checks your credit file(s).  On that basis, I would do everything all at once.  Get it over and done with 

Any regular to this forum knows I am not anti-overdraft or anti-credit card. But I am staggered that you have let things get into this mess, regardless of any factor relating to split-up with your wife. 13 Credit Cards ???? And you want to cut them down by a few ??
Before continuing, you say , in a "throw-away" comment that renting your house is not an option because of "local high costs"------I don't understand that at all, because an income from house rental would help you a lot, while you cut down on your whole way of life ( until you finally get clear, which looks a long way off).
At the risk of MSE members thinking Willing2Learn and I are cohabiting  

     I once again as usual agree with the advice he has given you-----get it all over with; you are long past the stage of what your credit score might look like ( and scores do NOT matter ).

And how about a consolidation loan ? What about a chat with the credit card companies to draw up a deal for paying off.  You say "most" of debts are in YOUR name----------Just like the house rental point, I am not sure what that means--------- ---are you left holding virtually all the debt ? Your wife's legal responsibilities and her attitude are of no little importance. 
I wish you all the luck in the world and I have not meant to sound patronising------but you have to change your entire financial outlook IMHO once the existing crisis has been put on course to be resolved. All The Best.

coachman12

Since posting the above, I have seen your latest posting TODAY asking about Universal Credit on the Benefits forum . Previous posts include you living in a luxury penthouse in an undesirable area. And before that, we have you facing being sued by Virgin. 
A lot of good people on these MSE forums have given up their time to provide you with helpful comments, including my own in the posting immediately before this one. 
Should we really have bothered ??????????????????????