Wife Confesses £10,000 CC debt, help please.

singlemum_4

Hey great advice on here.
Now I've got rid of my CC's I only deal in cash for day to day expences everything else on DD's so no cards!!I also keep a spending diary I find it keeps me from being tempted. Maybe its something Mrs Shocked could try too?

Kevicho

Hi shocked welcome to the forum.

Firstly id like to echo peoples sentiments on your actions, it must be wonderful for your wife to know you are their to help her and support her, in what must have been an awful experience for her to "own up" to the current situation.

I think first things first, id like to disagree with pretty much everyone here, by saying i would use the savings to clear the debt.
From a mathematical point of view whatever interest you are making, it is sure to be wiped out by the interest the debt is costing you.
Also balance transfers and tarting can be costly in fees nowadays, again these companies are making profit, usually from people who have little choice.

MSE 101, pay off debt first, then start saving.

Also the fresh start philosophy comes into play, i would rather start a path on 0, than 10K in debt knowing there is 10K available to clear it, that would drive me insane.

However as people have quite rightly said, we dont know the reasoning behind the debt accumulation, it could be she doesnt have enough money for essentials, or carelessness, or something else entirely, and i think that you and the wife need to have that discussion, it could be a 50/50 thing.

As you quite rightly say it is good to be on top of the finances, even if just one night a month, I am a big advocate of diaries, calendars, anything visual so you can both see the situation, spreadsheets are also excellent for working out to the penny what you can realisutically afford.

Im glad you havent looked to pin blame for this, as blame never helps, may i suggest yourself and the wife start looking into financial education.
There are many tapes on the subject, such as those by John Cummuta or David Bach, books by Martin of course, and a whole bunch of websites where these ideas are covered.

If she wants to change these will give her the tools to do it.

Best wishes with your decision

Kev

shocked_2

GeorgeUK wrote: »

In short - the less interest you pay to the banks, the more money is in your pocket. I would still go with the 0% transfer idea, but talk this over with the wife and make sure she sees the FULL big, scary picture. She may not be aware of how much she is spending or what on, so a spending diary for both of you may be in order - just so you can see where the savings can be made.

10k in 36 months = 277 (say 200 without the interest) so she is spending about 600 per month on nothing?

She needs to find out what this nothing is and tighten the belts for a few months.

Is that calc right George? 10k/36 months = 277/month, where did you get the £600 figure?

One thing, I did the "free" credit check from a link on MSE, the intention being to cancel the DD and thus have the information for free. However, once you have signed up, they ask for an *additional* £5.xx to see the actual credit rating, otherwise they just show you the actual credit history. So, even when I cancel the DD, I will still be £5.xx out of pocket. MSE guide on this does not seem to be aware of that and maybe should be updated. How do I get that info to ML?

How do I make up the standard SOA for here, is that the budget planner link up top? Or will I just post a copy and paste from my own spreadsheet?

shocked_2

lazy&indebt wrote: »

Of course you could always pay half of it off with your savings and transfer the other half - it'll reduce the debt down to around £5,000 and leave you with a fair bit of your savings that you can start to build up again after? Going on the £500 per month thing, that means you could clear the debt in 10 months and rebuild your savings in another 10 months...

I quite like that idea of splitting the damage, maybe between the savings and a 0% transfer with large monthly repayments.

Thanks.

bandraoi

shocked wrote: »

Although it is up to her to repay her debt, realistically, as a household, the whole family is going to be paying this back, her, me and the two kids. Any money that goes towards that debt will be coming out of the household income and as such the whole house is going to suffer.

Unless you find out something new and significant e.g. gambling or a serious expensive clothes shopping habit, your wife has not confessed to you that she owes £9000 on credit cards, but that you both owe £9000 on credit cards.

It's not her debt and they're not your savings. As a married couple, unless you're very unusual, you're eating the same food, using the same electricity, paying the mortgage on the same house, clothing the same children and going on the same holidays and nights out.

Essentially, you both spent the money, and you both wore blinkers ignoring the fact that you couldn't afford it. She did it by ignoring a rising total on credit cards and you did it by not sitting down and going through incomings vs outgoings.

Kevicho

try this site, free for one view a year

http://www.annualcreditreport.co.uk/

GeorgeUK

Hi shocked - was in a rush as boss was prowling

say she spends 200 on CC per month, you said there is also 700 surplus from your income and expenditure that is unaccounted for, so say 400 of that your wife is spending = 600

it looks like there is a £700 surplus every month. That means two thing, firstly not only has she been spending money we don't have thanks to CC companies, but she's also been frittering away a rather large monthly surplus.

There is not much point looking at the credit score online as every bank will calculate it differently. I would just concentrate on the credit history and not pay for these calculations that the lenders don't use - sorry i never mentioned that earlier.

If you want to post your own soa that's fine - alot of people coming here don't know where to even start so we point them to this example:
http://forums.moneysavingexpert.com/showthread.html?t=107280

shocked_2

I got the following leads from Uswitch. I can't see maximum bal. transfer figures for any of these though, I guess it depends on the credit limit they allow after the application is processed? Anyone have an inkling on how I can pre-estimate what that's likely to be? Are there any of these we would be barred from a 0% bal. transfer because she already took out a Barclaycard? Thanks for any advice on that.

EGG
http://new.egg.com/visitor/0,,3_84106--View_1763,00.html
0% FOR 15 MONTHS
3% Handling fee

VIRGIN
http://uk.virginmoney.com/credit-card-v3/pre-apply.html
0% FOR 15 MONTHS
2.98% Handling fee

MBNA
https://wwwn.applyonlinenow.com/UKCCapp/Ctl/entry?sc=8pob18gs01_ost&mc=SME-AP-11111-14857
0% for 12 months
3% Handling fee

BMI Baby CC
http://www.citibank.co.uk/personal/cards/bmibaby/features.htm?type=cards&merchant=citi&offer=A082
0% for 12 months
3% Handling

Buffythedebtslayer

Barclaycard is run by Barclays so you should be ok, Virgin is MNBA and I ve not heard of BMI babycc, citbank aren't so great tho - not sure but I think I have heard they can be difficult?

I would go for the Virgin and Egg, - if youcan't get it all on 0% use some of your savings?

If you have never had a credit card you might find it hard to get one? cos you have nothing to prove you are a good or bad credit risk - I know that doesn't sound like its makes a lot of sense but your wife probably could get one - her Credit rating will be fine if she hasn't missed any payments.

I think you are a fab husband!

xx

wattapain

Hi, I feel like we're not really hearing the full story. When others have talked about where the money's gone and how supportive the OP has been re Mrs Shocked, nothing much has been forthcoming, and i just get the feeling that all is not quite right!
You know of I'd run up a debt like that and had to own up to my OH, he'd a been MAD AS HELL for sure, and I would have needed several large glasses of something red beforehand.
And I'm also concerned that Mrs just doesn't seem to be having any input here either. Sit with her - find out where it all went - can anything go to ebay?
What are her plans to deal with the debt?
Just a few ramblings - sorry don't mean to upset anyone - and I think you ( the op) are absolutely wonderful for dealing with it as you have.
But it's a joint effort - and I'd just like to hear a little more of her take on it.
Terri