I really need to get out of this Barclaycard debt

Nexgenn

So I've dug myself into credit card debt over the past few years. Long story short, I worked part-time at minimum wage while studying, and used a Barclaycard to cover expenses I couldn't afford. I didn't realise how bad it was until I got a job offer in a different city, but had no savings for the move. My parents lent me first month's rent, which I’m repaying at £50/month. I now owe just under £4,000 on my Barclaycard and £700 to my old employer for over-taken holiday pay and the cycle-to-work scheme, also with a £50/month payment plan.

I earn £1,200/month, and after budgeting, even with projected overtime, I’m left with only £5. My credit card’s at its limit, and the interest payments have pretty much matched my minimum payment. I've been taking wages out of my next months wages via 'Wagestream' to make ends meet. I got a letter over 6 months ago telling me they're lowering the minimum payments, and I didn't heed the warnings, continued to use it until the limit, and am now paying the price. I got another letter a few months back saying I'm in danger of being in persistent debt and advising me to increase the minimum payments, but the damage was done.  

I'm angry at Barclays for lowering the minimum payments. I spent more than I would have, knowing I didn't have to pay as much back. I'm more angry at myself, for letting it get this far. I have ADHD and whilst it's not an excuse, it's an explanation for the carelessness with spending and budgeting. Now that I am medicated I see things clearly, I'm focused on turning things around.

I've looked into options like 0% interest cards (which I'm not eligible for due to high CC utilisation rates) and contacted StepChange. They suggested a DRO (taking into account other debts but they'll be paid off by mid next year) or DMP, but I’d rather avoid those since I plan to move into a higher-paying role (and my own place!) after graduation. Do you think Barclays would agree to freeze my interest for a few months to help me get back on track?

Brie

Get Stepchange to talk you through a financial assessment that shows how much money you (don't) have.  It should show the income, expenditure and how much is left available to pay debts.  Get them to tell Barclaycard that all you can afford is £1 a month or similar or less and that all the interest needs to be frozen.  This will reflect on your credit history (but so will you paying minimum each month).    Let them know that you hope things will be brighter for you in a few months or a year or whatever.  Once things ease up you can make higher payments and hopefully catch up quickly and clear the debt - but you'll have to be disciplined to make this happen.  No moving into a new place and thinking "oh I just need to buy XYZ" but get stuff off freegle or from charity shops instead.  

Let Barclaycard know that you are dealing with a debt agency (if not Stepchange then one of the other major FREE ones) so they take things seriously.  

Assuming things get better soon-ish this will be a blip on your credit history that will soon fade into the past.  A DRO will be an issue for a solid 6 years from being taken so you are right to think hard about going down that route.  

Nexgenn

Brie said:

Get Stepchange to talk you through a financial assessment that shows how much money you (don't) have.  It should show the income, expenditure and how much is left available to pay debts.  Get them to tell Barclaycard that all you can afford is £1 a month or similar or less and that all the interest needs to be frozen.  This will reflect on your credit history (but so will you paying minimum each month).    Let them know that you hope things will be brighter for you in a few months or a year or whatever.  Once things ease up you can make higher payments and hopefully catch up quickly and clear the debt - but you'll have to be disciplined to make this happen.  No moving into a new place and thinking "oh I just need to buy XYZ" but get stuff off freegle or from charity shops instead.  

Let Barclaycard know that you are dealing with a debt agency (if not Stepchange then one of the other major FREE ones) so they take things seriously.  

Assuming things get better soon-ish this will be a blip on your credit history that will soon fade into the past.  A DRO will be an issue for a solid 6 years from being taken so you are right to think hard about going down that route.  

Thanks! I didn't think about asking StepChange to do that. I filled out a budget online with them but I might speak to them as well. Yep, absolutely. I'm determined to start the new year off with a new outlook and set the ball rolling for a debt-free existence. 

Definitely, I think if I want to change I need to get myself out of this rather than rely on an insolvency option. I'm not one to take the easy way out, not now that I have actual goals and aspirations. I appreciate your advice, thankyou. 

fatbelly

Persistent debt is strictly defined and if your lender has identified this then they have a duty by the FCA to help you.

https://nationaldebtline.org/get-information/guides/persistent-debt-ew/

So ask them

On-the-coast

Easiest way out (if you’re able) is to remain financially disciplined, but find a new job or work more hours in current job (or find another part time job). Because 1200/month is a long way below the national full time minimum wage. 

Nexgenn

fatbelly said:

Persistent debt is strictly defined and if your lender has identified this then they have a duty by the FCA to help you.


So ask them

They can worm their way out of helping by telling me that they were warning I could go into persistent debt rather than am. But it's close enough, if it's enough for them to send a letter then it's obviously well on its way. 
I'll give them a call. Thanks

Nexgenn

On-the-coast said:

Easiest way out (if you’re able) is to remain financially disciplined, but find a new job or work more hours in current job (or find another part time job). Because 1200/month is a long way below the national full time minimum wage. 

Yeah it's part time, I'm also a student (no grants or anything as it's my second degree and distance learning), I'm picking up overtime wherever I can but it is quite scarce. 

On-the-coast

Nexgenn said:

On-the-coast said:

Easiest way out (if you’re able) is to remain financially disciplined, but find a new job or work more hours in current job (or find another part time job). Because 1200/month is a long way below the national full time minimum wage. 

Yeah it's part time, I'm also a student (no grants or anything as it's my second degree and distance learning), I'm picking up overtime wherever I can but it is quite scarce. 

Ah… that makes sense - thanks for clarifying.  At least there should be a light at the end of the tunnel on a few years (if not sooner)

Brie

Wondering about Wagestream.... how different is this to a payday loan company?  I can't see if they are charging interest except on one section of their site that talks about loans at up to about 17% - not as high as the old fashioned payday companies but still rather high.

And I suspect too that the use of this shows on your credit report - in which case Barclaycard would know about it as well.   

Jami74

Brie said:

Wondering about Wagestream.... how different is this to a payday loan company?  I can't see if they are charging interest except on one section of their site that talks about loans at up to about 17% - not as high as the old fashioned payday companies but still rather high.

And I suspect too that the use of this shows on your credit report - in which case Barclaycard would know about it as well.   

I don't know if it's different for different companies, but for me if I wanted to borrow against my wages there is a one off charge of £1.95. You're basically borrowing against your own salary and can only take a percentage of what you have already earned. Don't think they report to CRAs.

Obviously never ideal to use, but I suppose taking some two weeks into the month for a fee would be like getting paid fortnightly rather than having to wait the whole month. And no interest so preferable to a payday loan and probably cheaper than overdraft.

Nexgenn

On-the-coast said:

Nexgenn said:

On-the-coast said:

Easiest way out (if you’re able) is to remain financially disciplined, but find a new job or work more hours in current job (or find another part time job). Because 1200/month is a long way below the national full time minimum wage. 

Yeah it's part time, I'm also a student (no grants or anything as it's my second degree and distance learning), I'm picking up overtime wherever I can but it is quite scarce. 

Ah… that makes sense - thanks for clarifying.  At least there should be a light at the end of the tunnel on a few years (if not sooner)

Absolutely, I hope so! And I've learned my lesson about credit cards so should help me stay debt free in the future!