Debt Advice Appreciated

TW1980

Hi All,

My story seems to be similar to a few people on this forum in that over a number of years my debt had gradually increased and had been juggling the debt across 0% interest cards without taking into consideration what was actually happening. It was around October last year that reality dawned on me and I was about £22k in debt across 4 credit cards (all 0% interest). Since then I had made an effort to bring this down and I'm now at around £17k. Unfortunately, all 4 of my cards 0% periods expire in the next couple of months and even though my Credit Score is excellent ( although I'm aware that it doesn't actually mean much) I'm not eligible for any significant 0% period cards to transfer the debts. 

I read all the time that Debt Consolidation Loans may not be the way to go, but I've not spent on a credit card in well over 18 months. I've been pretty strict with my finances for a while now so would people still advise not to take this method? I am eligible for  a loan for the whole amount over 5 years at 6% interest which would be considerably better that paying the interest and capital on the cards.

Is there anything else I should be considering? 

Is there any more information I can give?

Many thanks for reading. 

[Deleted User]

Consolidation loans are rarely the way to go.

Take the 0% deals you're being offered and focus on hitting the debt that will go to the highest rate.

Post an SoA and you'll get advice on cutting costs and repaying faster.

TW1980

Thanks for the response.
Apparently I am eligible for a decent term MBNA card but I already have one. Can I have two cards from the same company? (I would assume I would be unable to transfer from the same company). I think my issue is that if I go for one of the short term 0% cards then after the 6/9 months the interest is usually astronomical so I would be in a similar boat to now but with a worse credit rating and higher interest? It also depends what credit limit I get - if it's £1000 then, while useful, it's a drop in the ocean. I appreciate I could be looking at it the wrong way?
I reckon you will say Sky TV should be the first to go but I still have a while left on contract and I recently managed to get the bill down pretty significantly. I have a basic package. I also recently got my Virgin broadband down from £56 to £42. 
If/when I have anything left over at the end of the month, it goes onto the cards. 

IN	£     1,850.40	OUT	Joint Acc	£     800.00
			Sky TV	£       43.50
			Car Tax	£       13.12
			Halifax CC	£       60.00
			MBNA CC	£     120.00
			Virgin Media	£       42.00
			Tesco CC	£       70.00
			Phone	£       33.00
			Spotify	£       10.00
			Virgin CC	£       60.00
			Netflix	£       13.99
			Car	£     226.00
				£  1,491.61
			Balance after bills	£     358.79
			HALIFAX (£5000) 19.3%	£  3,417.82
			MBNA (£8900) 21.3%	£  6,100.00
			TESCO (£6400) 21%	£  4,065.53
			VIRGIN (£10,200) 19.17%	£  3,466.92

 

ZaSa1418

Why is your netflix so expensive? If you really need it get it through sky and it is cheaper. Do you really need spotify? 
I have 2 mbna cards so it is doable but you cant transfer from 1 mbna to another. 
Do you really have £358.79 a month left? 
Where are all your other costs? mortgage/rent , council tax, gas, electric etc? 

TW1980

Cheers for responding.

Netflix - My wife's family use our account so I pay for the subscription where it can be used on multiple devices at the same time. Whilst I could take that away, her family do a lot for us (including saving us fair bit of money) so I don't really begrudge it.

I could probably live without Spotify to be fair.

Mortgage, Council Tax, Gas, Electric come out of the £800 to the joint account - my wife pays slightly over what I do on these things as I pay the Sky/broadband type stuff. 

Apologies, the SoA isn’t particularly granular but it works for me. The money that is left will go on grocery shopping, fuel and there is usually an adhoc thing or two in any given month. And, if I’m being honest, the odd take-away and perhaps a few beers. I feel a bit of a release is important. As I say whatever I have left goes on the cards.  

Naomim

I have 3 MBNA cards so yes you can have more than one.

Do you have any available offers on your current credit cards that you can shuffle to another if a deal is available? I'm in a similar position, my Barclaycard 0% is due to expire but have offers on my Virgin & MBNA cards so looking to just shuffle it all around without applying for any new credit.

Naomim 

TW1980

Hi,

It turns out after checking eligibility directly via company websites I can actually get some decent 0% cards. I should be able to use the new cards to transfer balances from my current two cards that are currently offering 0% interest for 12 months (MBNA and Tesco) and move the other cards balances (Halifax and Virgin) to those and close the accounts. So looks like I'll be interest free for at least another 12 months. Just got to try and nail them down as much as possible in that time... 

I'll update with how things are going but I feel a bit better about things now. 

Thanks all.

enthusiasticsaver

No I would not take a consolidation loan even assuming you actually get offered one at that rate for the whole amount. I would continue to pay the cards down tackling the most expensive first and transfer to new 0% cards if you are able to and you should get some if your credit history is ok. Debt consolidation loans tend to fool people into thinking the debts are sorted and they resort to the status quo. The fact you haven't spent on cards in the last 18 months is good but it might be because you already know you have more than £17k already outstanding. If you transfer that to a loan that often leads to a misguided view that your debt problems are sorted. 

ZaSa1418

TW1980 said:

Cheers for responding.

Netflix - My wife's family use our account so I pay for the subscription where it can be used on multiple devices at the same time. Whilst I could take that away, her family do a lot for us (including saving us fair bit of money) so I don't really begrudge it.

I could probably live without Spotify to be fair.

Mortgage, Council Tax, Gas, Electric come out of the £800 to the joint account - my wife pays slightly over what I do on these things as I pay the Sky/broadband type stuff. 

Apologies, the SoA isn’t particularly granular but it works for me. The money that is left will go on grocery shopping, fuel and there is usually an adhoc thing or two in any given month. And, if I’m being honest, the odd take-away and perhaps a few beers. I feel a bit of a release is important. As I say whatever I have left goes on the cards.  

You can still do this if you get the netflix through sky, look into it and it will save you some money