Aqua rate 51.40% Help - advice needed please

poshpaws_007

Hi, I've had my Aqua credit card for a 9 month promo period and was going well. I had an unexpected car bill so used a freshly paid off other card (Capital One). I am usually really good with my cards but somehow I have taken my eye off the ball completely and got a text message a few days ago stating the promo offer will finish on the 30th September 2023 and the interest rate changes to 51.40%! 
I have already tried to look for another balance transfer card bit none are available to me, even the poor credit builder ones.  I have contacted Vanquis which finishes this month but they said I have no offers available. I Can't get a loan anywhere either. 
I'm looking to contact my bank for help and to contact other cards I hold to ask for a balance transfer/increase limit but I'm already at a high level. 

I have a couple of people I can ask to lend me the money but that really is the last resort, and I really don't want to go to that option if I can try and resolve this. 

I already know how stupid I've been and really can't believe it. The amount outstanding is £1400 which equates to £700 interest going on! 

Are there any other options or advice I could try that I've not thought of please? I've already started communication to release some funds from my pension fund. 

Any help gladly appreciated 

MorningcoffeeIV

poshpaws_007 said:

I already know how stupid I've been and really can't believe it. The amount outstanding is £1400 which equates to £700 interest going on! 

Only if you leave the full 1400 on there for a year!

You'll be making at least minimum payments, so that's not going to happen (unless you also plan on spending more on it, in which case you need to dump that idea immediately). 

How much can you pay to it each month?

CliveOfIndia

It sounds like you've already got a fair amount of debt, which is why you're struggling to be accepted for anything further (whether loans or credit cards).

poshpaws_007 said:

The amount outstanding is £1400 which equates to £700 interest going on!

To hopefully ease your worries somewhat, interest doesn't work like that - just because the APR is 50%, they don't just add on another 50% to what you owe in one fell swoop.  If you're able to pay down the debt reasonably quickly, the amount of interest you pay (whilst not insignificant) won't be anything like £700.

As far as options go - do you have any savings you could use?  Presumably when you initially took out the Aqua card you had a plan to make sure it would be cleared at the end of the promo period?

One thing that probably would help is to head on over to the Debt-Free Wannabe board, fill out an SOA and let the good folk there take a look to see if there's any wiggle-room in your budget.  Very often a bit of short-term pain can pay big dividends in the long run, and seemingly insurmountable debts can be tackled with a bit of sacrifice and a good dollop of determination.

poshpaws_007 said:

I've already started communication to release some funds from my pension fund.

I'd be very careful about doing that.  Depending on your age there may be tax implications (if you're able to do it at all).  And in any case, do you really want to jeopardise your retirement for the sake of what is, at the end of the day, an unsecured debt?

Grumpy_chap

poshpaws_007 said:

Are there any other options or advice I could try that I've not thought of please? 

It would be a good idea to prepare a SoA (statement  of affairs) and visit the DfW (debt free wannabee) section of this forum.

poshpaws_007 said:

I've already started communication to release some funds from my pension fund. 

Beware that any pension early release scheme is legal, not accompanied by punitive tax or a scam.  This would usually be a last, rather than first, resort (though I note you have not mentioned your age which could change that).

km1500

Interest is added monthly so 52% apr would be about 4% a month ie approx  4% of the outstanding balance will be added as interest each month

Exodi

poshpaws_007 said:

I already know how stupid I've been and really can't believe it. The amount outstanding is £1400 which equates to £700 interest going on!

As has been said above, ~£700 interest would only be correct if you did not reduce the balance for the entire year. In reality you'd pay less depending on how quickly you can pay off the debt.

Using a bit of Maths wizardry, I calculate that you'd need to pay £145.41 every month for 12 months to clear the total debt including the interest (I've included a table below showing this month by month). If you did this, you'd pay under half the interest you suggest (£344.92).


(Assuming payments made at the start of the month)

Unfortunately I fear this situation is just a symptom of a greater problem.

MEM62

poshpaws_007 said:

I had an unexpected car bill so used a freshly paid off other card (Capital One). 

A credit card is not a good substitute for an emergency fund.  And if you run a car bills should not always be unexpected.  They need to be planned for.

poshpaws_007 said:

I have already tried to look for another balance transfer card bit none are available to me, even the poor credit builder ones.  I have contacted Vanquis which finishes this month but they said I have no offers available. I Can't get a loan anywhere either. 

This tends to suggest that you may already be heavily indebted.  Is that they case?  If so you will get some great advice by completing an SoA and posting it up on the DFW board.  The guys over there really know their stuff.   

poshpaws_007 said:

I've already started communication to release some funds from my pension fund. 

That is likely to be a mistake.  (And you cannot do it unless you are over 55 anyway)  Taking money from your pension is robbing your future self to fund you living expenses now.  If you are struggling now then retirement, when your income will be reduced, is already going to be more of a challenge.  Don't make it worse by taking from your pension.  You will need it.  

Swimmingupstream

Just remember the 50% won't be applied all at once. 
Its hard to know how to support you without a little more detail about your other debts and your income etc... you may benefit from posting up your statement of affairs in order for some further support. I am in a similar situation - so i know just how stressful it is.. Don't take from your pension pot. 

fatbelly

Good advice. See you over on the debt free wannabe board