Took out three credit cards in two months and all are nearly to their limit already

honeybee1234

Hi! 

I've gotten myself into a situation that has been bothering me and I feel quite ashamed really. 

Around three years ago, I went through a particularly bad patch in my life. I had a string of 'situations' that through no fault of my own led to some intensive mental health involvement and police contact. Unfortunately this has affected me very deeply and I have not yet recovered.

I was very fortunate to be able to move this year. This has been a very positive step and has helped my state of mind. I am currently undergoing some intensive therapy which has destabilised me somewhat. Over the course of the last couple of months, I have taken out *three* credit cards, all of which are close to their limits. This is SO unlike me - I've been used to budgeting and planning, but it started with "I'll put the planned purchases on a 0% card and pay it off in chunks over the 0% period", and has got to "how am I going to do this, my credit is shot, I'll never pay this off in time and I'll be stuck with huge interest payments and what if my PIP is taken away and I can't afford to live?"

I'd say about 85% were planned purchases, just were never meant to all be at the same time!

So I guess I'm saying how do I navigate this, I'm panicking at a situation which has gotten out of my grasp and I don't know what to do! I feel super ashamed of myself.

Thanks. 

MattMattMattUK

honeybee1234 said:

Hi! 

I've gotten myself into a situation that has been bothering me and I feel quite ashamed really. 

Around three years ago, I went through a particularly bad patch in my life. I had a string of 'situations' that through no fault of my own led to some intensive mental health involvement and police contact. Unfortunately this has affected me very deeply and I have not yet recovered.

I was very fortunate to be able to move this year. This has been a very positive step and has helped my state of mind. I am currently undergoing some intensive therapy which has destabilised me somewhat. Over the course of the last couple of months, I have taken out *three* credit cards, all of which are close to their limits. This is SO unlike me - I've been used to budgeting and planning, but it started with "I'll put the planned purchases on a 0% card and pay it off in chunks over the 0% period", and has got to "how am I going to do this, my credit is shot, I'll never pay this off in time and I'll be stuck with huge interest payments and what if my PIP is taken away and I can't afford to live?"

I'd say about 85% were planned purchases, just were never meant to all be at the same time!

So I guess I'm saying how do I navigate this, I'm panicking at a situation which has gotten out of my grasp and I don't know what to do! I feel super ashamed of myself.

Thanks. 

First, breathe, it is not as bad as it might feel right now and there are multiple routes to getting it solved. 

Second, can you pull together an SOA so that we can see what is possible.
https://www.lemonfool.co.uk/financecalculators/soa.php

Third, make sure you explain this to your therapist, it will factor into treatment as an additional pressure and an indicator of potential loss of impulse control which could be important to your treatment.

Finally (for the moment), these are non-priority debts, not paying them is far from disastrous, make sure you pay important things first such as rent/mortgage, council tax, basic utilities and food. Debts to banks are far less important. 

sourcrates

Consumer credit debts are all non priority, so if you can`t afford payments, don`t pay them at the expense of other priority debts, you will not be left with massive amounts of interest as the accounts will likely default before that happens.

Priority debts come first, anything else can wait, don`t beat yourself up about your situation, sometimes we can`t always control these things.

Brie

If you do decide to not pay your cards I do suggest you contact them and say you're in a tight spot and are reviewing your finances and need a break from your payments.  This potentially may buy you a couple of months without interest or fees.  

TheAble

Are these on 0% cards? It sounded like that was the intention but not entirely clear from your post.

If so, you're only a couple of months in so presumably they've a fair amount of time to run yet.

kezzygirl

TheAble said:

Are these on 0% cards? It sounded like that was the intention but not entirely clear from your post.

If so, you're only a couple of months in so presumably they've a fair amount of time to run yet.

Planned purchases on 0% cards. Think the op is blaming their mental state on making planned purchases.

Floss

kezzygirl said:

Planned purchases on 0% cards. Think the op is blaming their mental state on making planned purchases.

I think it's more a result of their MH condition & ongoing treatment impacting their judgement, rather than blaming their illness. 

honeybee1234

First, breathe, it is not as bad as it might feel right now and there are multiple routes to getting it solved. 

Second, can you pull together an SOA so that we can see what is possible.
https://www.lemonfool.co.uk/financecalculators/soa.php

Third, make sure you explain this to your therapist, it will factor into treatment as an additional pressure and an indicator of potential loss of impulse control which could be important to your treatment.

@MattMattMattUk I can do an SOA yes. I'm in a situation where currently I can afford to pay everything I need to each month and pay some extra - my concern is that my PIP award review is coming up in a year and if this changes it will impact things. 

sourcrates said:

Consumer credit debts are all non priority, so if you can`t afford payments, don`t pay them at the expense of other priority debts, you will not be left with massive amounts of interest as the accounts will likely default before that happens.

Priority debts come first, anything else can wait, don`t beat yourself up about your situation, sometimes we can`t always control these things.

Thanks @sourcrates

I'm not a fan of my brain too much atm. 

honeybee1234

Brie said:

If you do decide to not pay your cards I do suggest you contact them and say you're in a tight spot and are reviewing your finances and need a break from your payments.  This potentially may buy you a couple of months without interest or fees.  

Good idea @Brie, I'll bear this in mind.

TheAble said:

Are these on 0% cards? It sounded like that was the intention but not entirely clear from your post.

If so, you're only a couple of months in so presumably they've a fair amount of time to run yet.

Yes, that's right, all 0% APR. IIRC they're all around 12 months with 0% APR and I think I took the first one out at the start of June but I'll go off and check this.

honeybee1234

kezzygirl said:

TheAble said:

Are these on 0% cards? It sounded like that was the intention but not entirely clear from your post.

If so, you're only a couple of months in so presumably they've a fair amount of time to run yet.

Planned purchases on 0% cards. Think the op is blaming their mental state on making planned purchases.

I can't read the tone of your post @kezzygirl so I'll explain for clarity.

I moved house. I had purchases mostly related to this that I'd planned and researched, which were one/two at a time to be bought on a 0% card, and paid off over the life of the 0% offer so I was only dealing with a manageable amount of debt at a time. Further than this I had a rough plan to use 0% offers for further purchases, over a longer period of time. 

What I did instead was subsequently in quick succession took out two more credit cards and put ALL of my planned purchases in one go across the cards along with some random day-to-day spends and things like days out. 

I don't work due to my mental health conditions so am only on Universal Credit and PIP. My PIP is up for review this coming year and should it drop, I'll be in a situation where I potentially can't afford the minimum payments and this is what's worrying me. 

I've always been fairly level headed with finances and budgets... My current therapy has really destabilised me and my impulse control just disappeared. 

Floss said:

kezzygirl said:

Planned purchases on 0% cards. Think the op is blaming their mental state on making planned purchases.

I think it's more a result of their MH condition & ongoing treatment impacting their judgement, rather than blaming their illness. 

That's a good way to explain it @Floss. I've struggled with this elsewhere in my life and dealt with it, it's just escaped and manifested in my finances and I feel a bit out of control. 

sourcrates

The previous conservative Government held a review of PIP, which closed at the end of July.

Now what Starmer does with the results of this is anyone's guess at present, however, just to re-assure the OP, if for any reason your income drops, all you need to do is write to your creditors, and explain what has happened, you can`t afford payments due to loss of benefits, and they will put a hold on your accounts, they won`t be chased, until or unless, your situation changes.

So as far as your debts and potential loss of your PIP is concerned, you will be OK.

They can`t take what you don`t have, no amount of legal action, courts etc etc will change that fact, so don`t worry about it.

Lenders are very aware of affordability issues these days, what with the cost of living crisis and everything, they know all unsecured borrowings are non essential debts, and if the money isn`t there, they don`t get paid, its really that simple.