£20,000 Credit Card Debt - what to do?

compldc72

I have £20,000 Credit Card Debt with interest rates from 10-20% across 3 different cards. I don't have the best credit rating. I'm just looking at the best way to give me some breathing space. I've looked at credit card zero % transfer but they only offer up to £1500 plus I don't qualify for most. Whats my best option? I don't earn much but expecting some money next year so just want too remove the high interest payments for about 12 months then maybe next year I could afford to pay of the debt. guess my options are
1 - zero percent credit card transfers - although would need about 10 of these!!!
2 - cheap loan?
3 - overdraft on my bank account, don't have one at present
4 - any other ideas?

[Deleted User]

Head to the DFW boards for a more rounded review of your situation. More borrowing is unlikely to be the answer and they'll help you cut costs and repay faster.

Although if you've actually been offered a 0% card with a £1,500 limit and trust yourself not to run the debt back up, then grab it with both hands.

[Deleted User]

Bite the bullet and talk to the lenders about financial hardship and the minimum payments problem you have, they could well freeze the interest for example to allow you some breathing room. Then try snowballing the debt - pay the minimum on the lowest cards and throw everything you can at the highest % debt, this will reduce the debt and once it paid off, it frees up more money to then pay off the next most expensive debt and so on. 

If you are "expecting" some money, what do you mean? 

With 1 - the £1500 is always just a representative amount but there is no chance you'll get a £20k BT card with that much debt and you'd still have to pay it off after the end of the 0% period so it would just be a sticking plaster. With 2 - no chance you get a cheap loan, at the very least lenders will see a loan as your existing debts + the loan, not cards paid off immediately as there is no guarantee you won't just use the loan for a holiday so they have to follow responsible lending rules. 3 - overdrafts are expensive and just robbing Peter to pay Paul.

4 - Go to the debt free pages on here for help on budgeting as well as advice on anything you might be able to claim in terms of benefits etc. Maybe sell things, get a cheaper way to work e.g. bike instead of drive, shopping at Aldi etc

compldc72

thanks for the suggestions; I thought borrowing my way out of this was the answer but see it's not now. I'm owed some money which will help cover the debt but don't expect to get it til next year so was just trying to get the interest payments down but guess I'll just have to take the hit on it

QrizB

compldc72 said:

I have £20,000 Credit Card Debt with interest rates from 10-20% across 3 different cards.

Those rates aren't terrible, as credit cards go.

I don't have the best credit rating. I'm just looking at the best way to give me some breathing space. I've looked at credit card zero % transfer but they only offer up to £1500 plus I don't qualify for most.

As zx81 said:

... if you've actually been offered a 0% card with a £1,500 limit and trust yourself not to run the debt back up, then grab it with both hands.

If you can move some of the highest-rate debt to a 0% deal it will help you pay the rest off faster.

Whats my best option?

You have my sympathy, you seem keen to do the right thing. Unfortunately credit is one of those things where the less you need it, the easier it is to get.

MovingForwards

Ask @sourcrates to move this thread to the debt free board where you'll receive various bits of help and guidance, allowing that much needed support at the moment.

eskbanker

compldc72 said:

I'm owed some money which will help cover the debt but don't expect to get it til next year so was just trying to get the interest payments down but guess I'll just have to take the hit on it

Is there any potential to pass some or all of the interest burden onto whoever owes you the money?

Brie

Hopefully you're not still using the credit cards you have as that won't help you much.  Best thing I ever heard was that if you didn't want to actually cut up the cards then put them in plastic pot filled with water and then put that in the freezer.  That way if you had an urge to spend it will take you time to get to the card and you will hopefully come to your senses.

RBYHS

The mother of my girlfriend is in a very similar position to yours. 

She sent holding letters to all the creditors asking them if they could hold interests for a certain period of time (which will be reviewed upon ending) - holding request I think it’s called. 

They don’t have to accept it, but in her case, all did. MBNA, Lloyds and Barclaycard. Furthermore, she sent another letter asking if they could agree to a token £1 monthly payment (again, didn’t have to agree, but Barclaycard agreed). 

Now she’s been able to make affordable payments plans for all her credit cards.  She pays in total £61 monthly. And they will review this agreement every 6 months as long as she maintains it. 

If you’d like I can try and ask for the template she used if that’d help you.  Trying doesn’t cost anything. 

Good luck, remember that debt is just temporary as long as you take action. 

seatbeltnoob

you have to convert that cc debt (short term) into manageable debt. I remember once I had to spend £5K on a CC and the monthly interest was shocking for me. I think it was £150 a month which was more interest than I've ever paid (in total, over all the years).

£20K debt based on my experience could be £600 interest per month! Most people will have just enough money left over each month to pay the interest only.