Third Time’s The Charm

hugglemonster

That's amazing progress well done! Keep chipping away but celebrate the awesome achievement.

Good news on dd offer, I hope she gets the grades she needs and College are a bit more helpful.

H x

juicyjackieb

You are doing amazing! Debt clearing is slow and frustrating and can be a bit of a lonely process. Well done x 

Narola1976

Hi friends. I posted this on the CC forum but thought I would also post here in case you who read my ramblings have advice to offer.
——————————————
I just thought I would ask for some advice. I don’t want to make a bad decision. I will try to give all the info in one go. I have been on my DFJ since September 2019 and have made some progress. I have been snowballing my debt.  But I still have a long way to go. 

Currently I have 4 CC’s: 

• HSBC - Balance is £2065.65. Min payment is circa £65. Interest an eye watering 28.9%. Credit Limit - £9200.  I have been paying a lot towards this, nothing less than £536 and if all goes to plan will have paid this off by July / August 2021
• Barclays - Balance is £6344.28. Set payment of £180 which is few ££‘s more than min payment. Interest rate 17.03% simple rate. Credit Limit - £11700
• MBNA1 - Balance £7348.63. Set payment of £195 which is a few ££’s more than min payment. Interest rate is 20.93%. Have had 2 persistent debt letters. Credit Limit is £11500
• MBNA 2 - Balance is £ 11446.23. Set payment of £257 which is circa £30 more than min payment. Some of the balance is on 0% but this will end in June. I knew I would not be able to pay it off in time but I had transferred some of the HSBC balance because it had a much higher interest rate. Credit limit is £13500. Interest is 20.93%

I have not needed a payment break or anything and have always made my payments. However, despite history proving I am reliable, being so heavily committed and with 2 PD letters has meant I am not attractive to new BT cards. Which is completely understandable. My preference is not to apply for new cards anyway but use my existing cards for offers if possible. But lenders have tightened up considerably so these have been few and far between. I have not used the HSBC card since 2019 and have never used the others for anything but BT. 

I now have an offer from HSBC for 0% for 15 months, 2.9% fee. Clearly they have noted I am working hard to pay them off and am nearly there and they don’t want to lose the opportunity to get lots of interest out of me, based on historical behaviour which I hope I have now changed!  But I am so wary of taking them up on this offer for fear that I won’t be able to pay the balance off in time and then be stung with their very high interest rates for longer than I would like. But at the same time I am paying so much interest on the cards across the board, is it an acceptable risk?

I know that BC may actually close my card if I do transfer the balance, as they have been quite strict due to the pandemic. I am hopeful they won’t so I can try to transfer from MBNA one day. But I can’t know what will happen and must assume the worst. 

So what should I do - if I do transfer the BC amount, the £180 I was paying will be added to the £536 I am already paying and assuming they do what they say they will, i.e pay the interest bearing amount off first, I will be able to pay that amount in 3 to 4 months. I know the MBNA interest is higher than BC but the balance is higher and I won’t be able to transfer the whole amount whereas with BC I believe I could. 

So, should I take the risk and transfer? Or let sleeping dogs lie and finish HSBC off in 4 months. What would you do if you were in my shoes? If I do nothing, my DFD is July 2023. I can’t work out what it would be if I did do the BT because having an interest bearing amount and a 0% balance makes it harder to calculate.

Thanks, Narola

Sarahwithlove

Personally I would take the risk as hopefully in 15 months time you would be in a better position with the other cards and get another BT. Although you wouldn't be able to transfer all of the mbna I would be tempted to transfer what you can from that as I believe they are still one of the few offering BT so hopefully they would then give you another BT in 15 months time. Also lower interest on barclays and mbna 1 isnt that much more in terms of debt so hopefully wouldn't take too long to clear. 

Narola1976

Thanks for your response Sarah. I have given your advice some thought and went to check my two MBNA cards. It becomes a little more complicated.

MBNA 1 has 2 separate balances with 2 promotional rates. One rate is £2166.12 @ 6.94% until 2022. The second balance is £5288.95 @ 20.93%

MBNA 2 has 3 separate balances. One balance is £4786.95 @ 0% until June 2021. Then £6036 @ 20.93% BT and lastly £779.75 (MT) @ 20.93%. What I have noticed is that the Money Transfer balance just keeps going up because the payment is going to the BT first based on the T&C

I was thinking, would it be better to transfer from both MBNA cards. In other words, clear the £5288 from card one and leave the low interest rate amount in tack for now and then, whatever else I can clear from the second card, it won’t be much, maybe £1000?

Or is it better to just transfer as much as I can from the second card? 

It’s all so complicated and what I am most worried about is if MBNA ends up using the money to clear the 0% and 6.4% balances and I am no better off. the statement says they will focus on the balance with the highest interest rate first but I am worried I am missing something or have misinterpreted the info.

The transfer from BC seems to be the easiest option but as you say Sarah it has less interest.I have really learned my lesson with having multiple transfers on cards. 

Any advice will be gratefully received. 

jak

I’ve just read your whole diary. It’s brilliant and not at all boring by the way! Just thought I’d let you know it’s so inspirational they way you are cutting through your debt x

Sarahwithlove

Could you ring MBNA to discuss it with them? If they will take it from the higher interest amount then I would take it from MBNA but otherwise from Barclaycard. 

Narola1976

Morning diary readers. I hope you are all safe and well.

I have been going back and forth thinking about this BT issue. I did call MBNA and they assured me the BT would be paid off the highest interest balance. So I have decided to proceed with the BT next week once the DD’s have gone out.

But, after a closer look at the MBNA cards, I realised that it would be better to transfer from MBNA 2. Currently I have 3 balances on there. The first is at 0% which ends in June from last year’s transfer from HSBC. The second is circa £6000 BT balance which is on the standard rate and lastly £779 Money Transfer which is also on standard rate of 20.93. But what I have realised is that any payments I make goes off the BT amount only, as this is the order that MBNA allocate payments to. Which means that the MT amount has been steadily increasing month on month! A few months ago it was circa £500 now it is over £700. If I do not transfer from this account, when the 0% ends it will be added to the £6000 and the MT amount will continue to go up and up as it will never have any money allocated from the payments I make until the BT amount is paid up. Which means by that time it could be close to £2000!  So I have decided to transfer from this account, then next month, pay the full £779 or what ever it is, before the 0% ends so that come June, I will only have 1 balance on the card at the standard rate. I hope that makes sense. It does mean the HSBS interest bearing balance will be paid off in August rather than July, but this seems to make the most sense to me. Happy for anyone to point out flaws in my thinking.

I know I have come a long way, since I started seriously focusing on getting my finances in order (Sept 19), I have paid over £10,000 off my debt total. It’s hard to believe I could pay so much and yet still owe £28000 or thereabouts. I will be applying for a promotion in a couple of weeks and I stand a decent chance of getting it. There isn’t a massive jump in salary though, but I am not applying for the money as much as for the experience and skill development. I think after tax I would be lucky if I ended up with an extra £100, if even that. Should I be fortunate to get the job, whatever extra I get will go straight to debt payment. But in 2 or 3 months, Child Benefit will come to an end as DD will finish college, or even before as I will earn over the threshold, so I will see a drop in money or hopefully just a balancing out if I do get the job. 

Update on health and diet. Well by mid February I had done so well. I had lost a whole 2st since 1 November. I was able fit into several pairs of jeans and my favourite trousers I had not been able to wear in about 10 years. I was super excited. But, as I seem to always do, I sabotage myself. I had my vaccine and used this as an excuse to eat loads of junk. For nearly 2 weeks I could not pull myself back. I have only managed to get back on track these last few days. I avoided the scale as I did not want to know how much I had gained. When I last weighed, I was the lowest I have been in years. I just don’t know why I always mess up when I am doing so well. I don’t plan to weigh until middle April when it’s my birthday. When you have a whole person in body weight to lose as I do, its hard to stay focused. Like my finances, it’s a marathon, and not a sprint, so harder to keep on the straight and narrow. But the important thing is that I have not given up. I have to believe that failure is not falling down, but staying down. So as long as I can get back on it without months going by, I feel that is an achievement in itself. 

Right off to do a few jobs. Need to make some breakfast - keto pancakes.  Need to get the roast chicken into the oven, with some roast potatoes and veggies for lunch / supper. Also need to put a load of washing on, and try and tidy the lounge up a bit. 

Have a good Sunday x

Baileys_Babe

Your balance transfer plans seem logical to me.

You fell off your weight plan, you have acknowledged this, don't beat yourself up, get back to the plan being proud you haven't let it spiral unchecked.

Have you decided what the rules are for your birthday? It would be better to plan than beat yourself up for a very slight transgression 🤗

Parkyp

Well done on your debt payments that’s a fantastic amount. 2st off 👏👏👏, great achievement you know you can do it. Sometimes we need a blowout, but your back on track that’s the main thing. Dinner sounds lovely, enjoy your Sunday