Third Time’s The Charm

Narola1976

Thanks for stopping by enthusiastic saver. I have decided against a packaged bank account. DD is very responsible with her phone. It’s permanently attached to her I need to think on this again. I will certainly look into the tax thing. Hopefully today as work load is going to be light today, so I will actually be able to take a lunch break. 

So the bills are starting to go out and the bank balance is dropping fast. I was quite surprised to see MBNA has offered me a balance transfer. I am sorely tempted because one of my credit cards is on an eye watering 28.9% and while I can’t transfer all of the balance, close to half could go on 0%. But I am also wary because of my poor behaviour historically. And will it really make a difference?? And what impact will this have on my snowball amount? Could I end up having to pay more? Currently my snowball amount is £1004. I can’t afford to up it much more at this point, but I definitely won’t be paying less. So. I am going to run the numbers. Then when I have done so,  I am going to onto the DFW board and get the experienced people to check my numbers. I am not just going to rush into a BT this time.  I don’t think I will be tempted to use the credit card as I have not used it in 7 months. But still, I am worried. Any thoughts/advice gratefully received.

Mortgage has gone down.  I get such a kick to see the interest added was only £36. I told OH last night if he has any spare money he should throw it at the mortgage. We should really be taking advantage of the low rates. I don’t know if he will pay anything, we will have to see. 

I was up super early this morning, 4am. No idea why. But I got up to put the washing machine on, DD’s uniform needs washing for this evening’s shift. So needs getting on the line asap. OH has done that I as I refuse to navigate the junk yard that is our garden. Not my junk I hasten to add. 

Dinner tonight is Nando’s marinaded spatchcock chicken, which is marinating in the fridge for a few hours. Will pop in the oven around 3pm. To serve with salad, or root veg mash (precooked). I got this bag of root mash at a wholesale butchers and it was really worth it for £2 for the whole bag. It’s frozen and you just take a few pieces and pop in the microwave and there you have it. 

Right, off for a spot of breakfast. 

enthusiasticsaver

Certainly run the numbers as 28.9% is a high interest rate.  Is that the one you are targeting at the moment? Whether or not it is worth it depends on balance of card (and how much of it you can transfer), the fee and how long it will take you to clear it on your present plan.  If you BT it and then don't pay it off though this is where the problems lie.  It sounds like you are starting to follow good behaviours now though so maybe BT it for the 0% interest but in your mind still keep the plan it has to be repaid.  How much of  your debt is at 0%.  Why not put the numbers up  with balances, interest rates  and deal expiry dates for advice? 

Narola1976

enthusiasticsaver said:

Certainly run the numbers as 28.9% is a high interest rate.  Is that the one you are targeting at the moment? Whether or not it is worth it depends on balance of card (and how much of it you can transfer), the fee and how long it will take you to clear it on your present plan.  If you BT it and then don't pay it off though this is where the problems lie.  It sounds like you are starting to follow good behaviours now though so maybe BT it for the 0% interest but in your mind still keep the plan it has to be repaid.  How much of  your debt is at 0%.  Why not put the numbers up  with balances, interest rates  and deal expiry dates for advice? 

Thanks @enthusiasticsaver

I have put up a post on DFW board if you have time to have a look? The reality is I am not going to be able to pay the 0% debt within 12 months - it will incur interest at the end of the promo period. The question is whether it is better for a card charging 20.93% to have some of the debt at the end rather than the one charging 28.9%. Yes, I am targeting the 28.9% card after the Argos which is at 29.9%. Dear god, I am an idiot. Just typing those numbers makes me want to hurl

Moneywhizz

Commented on your other thread  about how I see the balance transfer option.

Narola1976

So, I have run the numbers and got some advice. The general consensus is that moving as much as possible from the high interest card to a 0% offer, even for 12 months is better than not. As long as I am sure I won’t spend on the card just partly cleared. If I am sure of nothing else, I am sure that I will not be spending on this CC. I have not used it in 7 months, and I fully intend to reduce the credit limit. I don’t much care what impact that has in the short term on my credit file. I do not intend to seek further credit so the point is moot. One of the posters made me realise that this offer could easily go away and I am worried if I do not take up this offer, it could disappear. Lenders are tightening their belts.

The other thing that worries me is that this month one 0% deal on my Barclaycard is coming to an end, and the same again in August, which means my minimum payment will jump by about £60 to £70 to account for the interest. And what if, when MBNA does a further review at the point of application if I wait until this happens, and this puts them off and the offer is declined which is worse than it being withdrawn. So I am in a quandary. If I do decided to proceed with the BT, I need to do so this week. I have looked at the budget for July, I know its not the YNAB way but I have to know what’s ahead. So, I rejigged the figures to reflect the likely new amounts that I have estimated, and I think my snowball amount will need to increase by about £55 to £65. I have reconfigured the budget and it is doable. Just. The point is every which way I look at it, I would have to increase the snowball amount as the two 0% deals ending would have done that anyway for me. 

So unless I am missing anything, I don’t think I have much option but to go for the BT. Yes? No?

Narola1976

After some great advice, and not withstanding the above, I have decided to proceed with the BT request, and fingers crossed it is granted. Thanks to all who took the time on my other post to give advice. If I had made the same effort 4 years ago to ask advice and listen to people smarter than me I would be debt free by now. Ok, enough self flagellation, I was an idiot, yaddah yaddah, get on with it now. No more pity parties. Onward and upward.

enthusiasticsaver

I have commented on your other thread about the BT deal and I definitely think you should go for it asap.  I was not aware you had other deals finishing as well so this could have an impact overall on the minimums.  Maybe once you have done the BT put up balances, interest rates and deal expiry dates to decide which card to overpay although there are online snowball calculators which will work it out for you. I assumed it would be your HSBC (the one charging 28.93%) although if you have one charging 29.9% that one should be the focus.  How much is the balance on Argos? 

enthusiasticsaver

Another thing I would say is while I agree you should be throwing as much as possible to the cards to get them repaid it must go hand in hand with saving for emergencies and expected annual payments for things like Christmas, insurances, car service etc etc or you will be tempted to use a card to cover those things.  You need a sustainable budget going forward and once the debt is gone you will then have an extra £1000 a month to pay for things you really want to spend your  money on. 

Snwps

Hiya, great diary, really enjoyed reading so far and wishing you all the best for your journey. 

Can I ask what snowball app you speak of in your diary? I love budgeting and forcasting and I spend ages reviewing YNAB to make sure I've not missed anything and that every penny is being used to its full potential. 

I know it seems such a long slog but stick with it. I started my journey this time last year with a similar figure to yours an for the first time ever this figure is going down. It does take a while to see the full effects of your hard work, it's only now I'm feeling I'm getting somewhere and I hit the 25% mark this morning. 

Narola1976

Thanks @enthusiasticsaver really appreciate your advice.  With YNAB I am working hard to build my savings pots for Christmas, general and other annual bills. The disposable income is limited so the pots are small but I am working on it. I fully agree the budget needs to consider true expenses to avoid going back into credit. I have a category for every single expense so there are no surprises. Just need time to build these savings. And a mindset of frugality. The Argos balance is just under 2k so a substantial sum.  So I am tackling this first. I will be applying for the BT today - thank you for the advice. I shall report back.

@Snwps thank you for checking out my diary, glad it hasn’t bored you Congrats on your achievements so far. I hope to be able to say the same in a year or so. So the snowball app I use is called Debt Payoff Planner. I really like it. It’s basic but it does the job. I stare at it and YNAB multiple times per day. Every penny is accounted for, just like you.  Let me know how you get on with it.