Transfer Manoeuvres

ICOB136

Hi All,

I'd be really grateful if you could have a look and check my reasoning on this.

I thought I was in a hole, but I am starting to hatch a plan. It feels like one of my credit card providers might put up a barrier as I carry out my manoeuvres. Please let me know if you think this will work. Here is my initial situation (approx figures):

Card 1 - 15k at 25%, 20k Limit
Card 2 - 2.5k at 33%, 1k at 6.9%, 4K Limit
Card 3 - 8k at 3.9%, 10k Limit (same provider as card 2)
Card 4 - 3k at 7.9%, 9k Limit
Card 5 - 4.4k at 19%, 5.1k Limit

C1 just went from 0% to 25%, minimum payment went from £150 to £500. I thought there was no way out. I transferred 5k from C4 to C1 at 7.9% on Sunday. I requested 1.3k from C3 to C1 at 5.9% this morning. This will leave me with 8.7K at 25% on C1 and option to transfer up 9.7k from C1. 

My plan next is to do a money transfer from C1 of 9.7k. From this I could use 8.7k to pay off balance attracting 25% on C1 and 1k to reduce balance on C2. New balance on C1 will be 10.1k including transfer fee, this will be at 0%. I would then use the room I have made on C1 for transfers to pay off C2, C5, and potentially some of C4. 

End game would be roughly this:

C1 - 19k at 0%
C2 - zero balance
C3 - 9.3k largely at 3.9%, little bit at 5.9%
C4 - 6k at 7.9%
C5 - zero balance

My two concerns are:

1. Is C1 likely to withdraw its current transfer offer after I make the £9.7k transfer from them and use it to pay off my high interest balance with them? At present they say the offer is valid for transfers up to the end of next month. I saw on another thread that there is no issue with using their money transfer to pay off the balance with them.

2. Is this likely to impact the quality or availability of transfer offers from C2 and C5? 

It has given me headaches trying to find a way through this. Please let me know if you see any better options or potential pitfalls.

Thank you very much to anybody that has taken the time to read.

  

born_again

While it should work.
I would post in Debt section with a statement of affairs. As a £30K+ debt is dangerous place to be. Unless your income is at least double that a year.
 You will get good & none judgmental advice on your situation & ways to help you out 👍

ICOB136

Thanks Born Again. It is great to hear you think it should work.

Is there a reason you think it might not work? 

You are right, this is not a good place to be at all. But, I have to try and manage it for now. I am trying to buy the time I need to get through financial proceedings in Family Court. My affairs will not be determined until that concludes. In the meantime, my hands are tied. So, I am trying to work out if this is the best way of firefighting.

Thanks for responding so quickly.    

retiredbanker1

It might work this time (just?) but next time or the time after??? There will come a time when your options will be severely limited so IMO now is the best time to take action (whilst you are in control of things).

Do as born_again said - do your income and expenditure statement - try your best to cut out ALL unnecessary outgoings to put all of your available monies to reduce your debts.
You only need to get in trouble with one card to bring the rest down - I have seen it many times before and before you ask you cannot borrow your way out of debt.

ICOB136

Thank you Retiredbanker,

Please can you expand on "it might work this time (just?)". Which part of my plan to get from the above "initial situation" to the above "end game" do you think might not work? It is this specific part of my broader financial affairs that I would really value input on.

In regard to broader considerations.

The points you make are all correct, I know I cannot borrow my way out of debt. The total debt in my initial scenario is about equal to the total debt in the hoped for 'end game'. I am not looking to borrow additional funds or to increase my borrowing capacity. My understanding is that reducing interest rates from 33, 25 and 19%, to 0, 3.9, 5.9 and 7.9%, would reduce unnecessary outgoings as you so wisely suggest I do. There is no unnecessary expenditure remaining to be cut, there are no available monies to further reduce debts. If I do not do as outlined in my initial post I will be defaulting on minimum payments before Christmas. If I do as outlined above I should be able to get to the middle of next year at least. The long term plan ties in with assets and earning potential that are not available to me until conclusion of family court proceedings. Avoiding insolvency and protecting my credit rating for the interim is my aim. To be clear, I do not for a moment believe that the credit card portfolio I have laid out is healthy or sensible. 

retiredbanker1

ICOB136 said:

Thank you Retiredbanker,

Please can you expand on "it might work this time (just?)". Which part of my plan to get from the above "initial situation" to the above "end game" do you think might not work? It is this specific part of my broader financial affairs that I would really value input on.


. 

You have a lot of debt - a lot of it incurring interest.
There will come a time when you find that you run out of cards to transfer balances to.

To avoid this you (IMO) change your spending habits now to start repaying some of this.

We do not know your income or expenditure but it does not take a genius to work out that you are overspending to reach £30k of debt.
You will spook some lenders at that level.

born_again

Thanks for the reply.
No one ever knows just how CC may react. Your recent £5K could spook them & pull the money transfer, all you can do is try.

But 
 If I do not do as outlined in my initial post I will be defaulting on minimum payments before Christmas.

I know you said about  I am trying to buy the time I need to get through financial proceedings in Family Court. My affairs will not be determined until that concludes.

Maybe this is the time to bite the bullet, rather than move debt around & find that, your recent increased debt on 2 cards is going to cause issues.

So please look at the debt board, even just to get some advice from people who have been through the same & can offer the best advice at this point.

ICOB136

retiredbanker1 said:

ICOB136 said:

Thank you Retiredbanker,

Please can you expand on "it might work this time (just?)". Which part of my plan to get from the above "initial situation" to the above "end game" do you think might not work? It is this specific part of my broader financial affairs that I would really value input on.


. 

You have a lot of debt - a lot of it incurring interest.
There will come a time when you find that you run out of cards to transfer balances to.

To avoid this you (IMO) change your spending habits now to start repaying some of this.

We do not know your income or expenditure but it does not take a genius to work out that you are overspending to reach £30k of debt.
You will spook some lenders at that level.

Thanks you for your response. Just to reiterate, I am not seeking new credit and I am not increasing my overall debt. Nor am I proposing a long term solution, let alone recommending the path I have taken to this point. 

With the greatest respect, you do not know the circumstances relating to my debt and you have no knowledge of my expenditure. A "genius" would probably consider what money was spent on before assuming that overspending is taking place. 

Again with respect, I have already informed you that there is no remaining scope to reduce my spending. I am not ready to give up my "habits", i.e. buying food and paying utility bills. I have given up: Which?; English Heritage; Woodland and Wildfowl Trust; Amazon Prime; trade union membership; all leisure expenditure... My spending has been pared to the core.

I appreciate you are probably trying to be helpful. I'm afraid you are passing judgement from a position of ignorance. 

th081

Just to check are you waiting for the statement dates to pass before you make the payments etc. 

ICOB136

born_again said:

Thanks for the reply.
No one ever knows just how CC may react. Your recent £5K could spook them & pull the money transfer, all you can do is try.

But 
 If I do not do as outlined in my initial post I will be defaulting on minimum payments before Christmas.

I know you said about  I am trying to buy the time I need to get through financial proceedings in Family Court. My affairs will not be determined until that concludes.

Maybe this is the time to bite the bullet, rather than move debt around & find that, your recent increased debt on 2 cards is going to cause issues.

So please look at the debt board, even just to get some advice from people who have been through the same & can offer the best advice at this point.

Thanks again Born Again.

retiredbanker1

ICOB136 said:

retiredbanker1 said:

ICOB136 said:

Thank you Retiredbanker,

Please can you expand on "it might work this time (just?)". Which part of my plan to get from the above "initial situation" to the above "end game" do you think might not work? It is this specific part of my broader financial affairs that I would really value input on.


. 

You have a lot of debt - a lot of it incurring interest.
There will come a time when you find that you run out of cards to transfer balances to.

To avoid this you (IMO) change your spending habits now to start repaying some of this.

We do not know your income or expenditure but it does not take a genius to work out that you are overspending to reach £30k of debt.
You will spook some lenders at that level.

Thanks you for your response. 

I appreciate you are probably trying to be helpful. I'm afraid you are passing judgement from a position of ignorance. 

Well you did ask.