Credit card debt has spiralled

th081

If you get a combined 6350 from your new zero deals then you can move the very, virgin and Tesco to zero deals and hope for some additional zero deals from your existing providers later. 

For June onwards you could work out across your cards the minimum payment, interest (if applicable ), actual payment you made to see if going forward you are cutting the debt. That way you can extrapolate where you will be each month and where you will be in 12/18 months.

The more info you put into a budget the smaller it gets because you capture spend you just tend to miss or assume you don't spend when you do. But the advantage is you get a lot more realistic picture. I am speculating a little bit but I think as things are so tight until your GF is fully back at work you will do well to cut your debt by by 1-2k over 12/18 months. And it's keeping afloat until over time you make more inroads into the debt.

ayupmeduck

BlueManc10 said:

HI all, cheers for all your advice since I last posted. I think I have formed a short term plan, to help me tackle this, but would welcome your thoughts before I commit. 

I think one of the overwhelming factors in all of this, is the amount of different creditors I have and keeping a track of them all. So, I have looked into the possibility of an updraft loan, and they are willing to give me £8k at a rate of 17.9%. This would mean over the next 47 months I pay £230 a month. it sounds strange to say, but the amount of money i pay back over the time isn't my main priority, it's more managing all the different outgoings and DDs and feeling more in control. 

I suppose my first question is, am I best off paying off the 2 cards with the lowest debt, and then a large chunk of one of my cards with larger amounts, or split the reminder after the smaller two over the bigger two....if that makes sense?

I have also been accepted for a 0% balance transfer card for 22 months with a 3k limit, so I can effectively pay off my 2 smaller cards, and a chunk off the next biggest, and transfer the remainder onto my new card. I can then close down the 3 cards and all I will have to pay monthly is my updraft loan - which I cannot then reuse as the cards are gone, as this is what happens currently, I pay off and then respend, my balance transfer card and the CC with the largest amount. This will reduce my monthly outgoings and I will be making serious inroads into that first £8k and the next £3k, and I can see a path to the end. I can also increase my monthly amounts on my updraft loan when my financial position improves with the other half back at work. 

Does this sound like a sort of plan, or am I just robbing Peter to pay Paul to end up no better off?
 

Thought you owed £17k. Unless I've miss read the above, it's only £11k you are talking about.

BlueManc10

ayupmeduck said

Thought you owed £17k. Unless I've miss read the above, it's only £11k you are talking about.

That was just my plan to hit the first 11k the remainder I would still be paying alongside this. But I've not gone with the loan option now. I've decided to go for the 2 0% BTs which I've got about £6k limit and pay those off in the time frames whilst paying minimum payments on the others. That should then see me half the debt over this period. Then by the time they are paid down I should hopefully have another BT offer available to move some of the balance 

MrFrugalFever

BlueManc10 said:

ayupmeduck said

Thought you owed £17k. Unless I've miss read the above, it's only £11k you are talking about.

That was just my plan to hit the first 11k the remainder I would still be paying alongside this. But I've not gone with the loan option now. I've decided to go for the 2 0% BTs which I've got about £6k limit and pay those off in the time frames whilst paying minimum payments on the others. That should then see me half the debt over this period. Then by the time they are paid down I should hopefully have another BT offer available to move some of the balance 

I may get a bit of stick for this as it’s generally advised that you shouldn’t automatically assume a 0% BT or MT offer will be readily available once current ones come to an end but…..
I would pay slightly above minimum on 0% and maximum on interest bearing for most of the 0% term.

It is going to be a case of finely tuning your finances each month accordingly and doing the occasional eligibility check for offers during the 0% period to have a plan in place. Should you encounter the ‘worst case’ scenario which is 0% deals are off the table then reverting back to the Snowballing method for all credit facilities would potentially apply.

BlueManc10

I may get a bit of stick for this as it’s generally advised that you shouldn’t automatically assume a 0% BT or MT offer will be readily available once current ones come to an end but…..
I would pay slightly above minimum on 0% and maximum on interest bearing for most of the 0% term.

It is going to be a case of finely tuning your finances each month accordingly and doing the occasional eligibility check for offers during the 0% period to have a plan in place. Should you encounter the ‘worst case’ scenario which is 0% deals are off the table then reverting back to the Snowballing method for all credit facilities would potentially apply.

I was thinking this. I think once I get both my new BT cards and I have an agreed credit limit. I need to sit down with all the facts and figures and come up with a plan. The BTs are both over a decent period so there will be time to find other offers as I go. My Barclaycard which is one of my highest rates are always offering 0% but I've never had enough limit left to transfer anything so I'm thinking I could hit this hard while paying minimums on the new card and then clear some credit limit so if another offer pops up on this I can transfer some over. 

MrFrugalFever

If you opt for scenario whereby you pay minimum on 0% CC’s then you will have a combined debt of approx £3669 at 18 months assuming it is a 3% minimum payment amount.

That is almost halved so still a good step in he right direction in my opinion.

BlueManc10

MrFrugalFever said:

If you opt for scenario whereby you pay minimum on 0% CC’s then you will have a combined debt of approx £3669 at 18 months assuming it is a 3% minimum payment amount.

That is almost halved so still a good step in he right direction in my opinion.

Thanks. And in that time I will also be attacking the other debts too with as much as I can so ideally I can pay a good 5/6k off those to. So fingers crossed in 18months I can half if not better the whole debt. I feel like once I can get it sub 10k then mentally ill feel so much better about the whole thing. Which sounds odd as that's still a lot of money but psychologically I feel it's so much more manageable then. 

BlueManc10

My thinking on the under 10k in 18 months thing is because by then both kids will almost be at school and I'd hope to be earning more money so I will hopefully have lots more money to throw at this and I feel at that point it will be much easier and less of a burden. Just wanted to put that in so you don't all think I'm being naive and ignorant of a 10k debt