Turnin 30 and £16k in

Mohagan3

Hi guys! This has taken me a long time ti post! Just being young and stupid. Takin CC out to ‘build credit’ and loans that were too easily available to me I’ve got into abit of bother. I know it’s not a lot but it’s scares me. 

I’ve recently paid off two of my low limit CC and got rid of them which takes me down to 5. I’ve budgeted myself £20 a week for things I need as I’m still at home with my parents. My wages can very month to month as I’m on salary/bonus. 

I’ve never missed a payment on any of my loans which is good! They’re roughly 511 per month. I should have another CC Low limit paid off by the end of this month and I’ll move onto the next. Am I doing the right thing? I haven’t spoken to anyone about this as in my family etc. Have done a StepChange and they have giving me a plan as I’ve still enough left over per month 

fatbelly

It sounds good. You should pay the highest interest things off first, so that may well be the credit cards.

Do you want to list precisely what you've got left, with balance and apr?

RAS

Hi, it may be tempting to pay off the cards with the lowest amount of debt first, but you will clear your debt faster and at lower cost if you pay off the debt with the highest interest rate first. 

Set the amount you pay off the other debts slightly above the minimum amount as this improves your profile, then shoves everything else towards the debt with the highest interest rate. 

Have you checked whether you can get any balance transfers to lower rate cards. There is usually a cost (2-3%) and you need to be confident that the rate it defaults to afterwards is no higher than you are currently paying. Do soft search using MSE's cheap credit card tool.

gwynlas

As above but whatever you do continue to pay things down and do not take on any further ccs or loans. Hopefully you have reached your lightbulb moment and will not reach the stage where your credit rating is trashed. When you are young with few responsibilities it is very tempting to live in the moment and treat yourself but what you do now can impact drastically on your future.

MovingForwards

I cleared my smaller debts, while also saving money to clear the bigger ones. It felt like I was getting somewhere to see the amount of companies reduce even if I was only scratching at the bigger ones.

The difference for me was mine had defaulted and no interest was being applied.

Mohagan3

Hi everyone! Thanks your the replies! 

@fatbelly here is a list of the CCs needing paid off still: these are the ones I can find the highest apr: 

Captial one: 30.34%- o/s bal: £697
118: 33.4% - o/s bal: £1155
zable: 34.90%- o/s bal: £800

Mohagan3

MovingForwards said:

I cleared my smaller debts, while also saving money to clear the bigger ones. It felt like I was getting somewhere to see the amount of companies reduce even if I was only scratching at the bigger ones.

The difference for me was mine had defaulted and no interest was being applied.

Hiya! Yes I totally understand you! Seeing having two CCs already paid off it gave me a boost but now I’ve had more sleepless nights worrying about it. It can’t be helped due to my anxiety but it’s rather start than do nothing! Any ‘free money’ I’ve left this month before I get paid is going towards another card! 

sourcrates

Try not to have sleepless nights, your debts are very small in comparison to some people, they will be paid off in time, having anxiety tends to spiral things out of all proportion in your head, so try and stay calm about it, things could be a lot worse, and you're doing OK.

Mohagan3

@sourcrates thank you! I’ve spoken to my mum there and she’s abit angry that I haven’t came to her. She wants to give me the money to clear my CCs and I’ll just pay her back. She’s worried about interest rates etc 

RAS

Explain to your mum that lovely as she is, you'd rather deal with the credit companies than with her. Money and family don't mix. Because either she'll refuse to let you pay it back as you want, or she'll suddenly need some of that money urgently, just when you thought you could slacken up. That builds resentment both side.

And explain that people on MSE who inhabit these forums have seen loads of folks who clear their debt "easily" by getting a loan or getting it paid off, and as a result have never learned budgeting. So 5 years down the line, they are back in debt, quite often a lot more debt.

You have the chance to learn how to pay your debts off and learn how to budget which is a far better thing to learn than having mummy bail you out.

Now pay off zable then 118, should be possible in 5 months.

And start looking at your future budget SOA CALCULATOR (for DFW newbies): SOA Calculator

Mohagan3

@RAS I’ve told her this but she still wants to help. I’ve told her it’s not that I’ve defaulted into any arrears etc but I’m just struggling abit. I’ve told her I will be paying her back and she says that’s fine so maybe for now. I’m thinking just getting enough to cover the big ones and then cutting the cards up as I won’t need them anymore. Is it better too keep the card and not use them or cancel them with the company?