till debt do us part

Tondella

Hi Guys
If I can just recap on where I am at. I've identified all our credit card debts now, the bulk of which are on 13.9% and 12.9% APR. WE've discussed the pros and cons of taking some of OH's (currently insured) debt under my own name and also that OH has a mid-fair credit record (which we are investigating to improve). In the first instanc I want to have a go at the credit card shuffle and make the most of the credit card products we currently have, before then beginning to apply for some new customer products.

I've posted this request under one of the credit card strings too but this string is way more active. Can anyone make any suggestions to get the most out of the existing ccs? Currently situation:

Barclaycard: I've just negotiated 6.9% APR on £3k for life of balance
Egg: 0% APR anniversary soon ending, do they do any other existing customer offers?
Lloyds platinum: £14.5k at 13.9% APR. OH has previously called Lloyds to try and negotiate a better APR and all they would do was upgrade him to the platinum which had a marginally better APR. He phoned them tonight but customer retention people had already gone home and no one left could negotiate APR. Does anyone have any suggestions as to how we could pitch for a better APR for the existing balance or any way in which we can magically transfer the £14.5 k off the card and then back on a balance transfer rate???

We also have £7k on halifax cc at the slighty better 12.9% APR, this amount is not at credit limit and so we plan to shift some of the lloyds balance over to here. Should we negotiate a preferential balance transfer rate from Halifax for this lloyds transfer or will the biasing of repayments to the lesser rate mean that the debt hangs around for longer (snowball can't cope with this level of complexity). Do we stand a chance of negotiating a lower APR for the existing halifax balance? Does anyone have any experience of this cc??

Any tips greatly received, bet there's some homes around Britain filled with the smell of freshly made bread tonight!

ffs

Forgive me if I am wrong, but it sounds as if things are not yet out of control, but on more piece of bad luck would push you over the edge. Therefore you are being smart and doing everything you can to reduce the cost of your credit. The unfortunate side effect of this is that it means that when the unfortunate/unexpected happens you will have credit available to try to ride it out, and almost enough income to make the repayments, so that is what you do. The problem is there is nowhere to go from here. The capital you have borrowed is now far in excess of what you ever intended and your income is only just enough to service the interest. The effect of minimising the cost of your credit, is to give you access to yet more credit that one day you will feel forced to use.

Tondella

So you recommend leaving all the debts on the high rate APRs as a punitive measure to prevent overspending in the future??

Hopefully if you look back over all of this thread you'll understand that the credit card shuffle is not my only approach to minimising the debt. I've already completed my MSE budget, OH is currently working on his, to free up as much cash as possible to pay off the debts. Having done this we actually have quite a bit of income to service the debts, in fact we are already comfortably meeting the minimum payments each month (but we all know about the minimum payment trap, don't we!). Should there be an emergency it is always possible to pay off the minimum for that month and use what we would normally budget for debt repayment towards said emergency. Or if worse comes to the worst and we have a big emergency we will just have to put it on credit (as martin suggests when he recommends forfeiting all savings in order to pay off debts). Whether we do the shuffle or suffer our high APRs sooner or later we are going to have some available credit, and if we haven't learnt our lesson from this time around then the debts will build up again. Surely the point is to pay off the debt asap and at the same time learn better money management skills? Have some faith !!!!!!

margaretclare

Tondella wrote:

So you recommend leaving all the debts on the high rate APRs as a punitive measure to prevent overspending in the future??

Hopefully if you look back over all of this thread you'll understand that the credit card shuffle is not my only approach to minimising the debt. I've Sooner or later we are going to have some available credit, and if we haven't learnt our lesson from this time around then the debts will build up again. Surely the point is to pay off the debt asap and at the same time learn better money management skills? Have some faith !!!!!!

Yes, this is what it's all about - pay off your debts and learn money management skills. Learning money management skills will stand you in good stead for the rest of your lives. The reason why so many people are in this deep doo-doo is because credit has become so easy to obtain, and people haven't acquired the skills to deal with it!

From my own experience, I would recommend getting hold of some personal accounting software. I use Quicken, but others swear by MS Money. It takes a little time to set up all your accounts on the software, but once done, look at it daily, reconcile your bank statements with your own accounts, and it's there in front of you - no need to say, as some people do 'I know I'm in debt but I don't know by how much'. Or they don't know how much interest they're paying on cards - they think it's OK just to pay off the minimum required on each card every month, max that card out, get another one...but paying off only the minimum may keep the card provider happy (of course!) but it does mean you will NEVER pay that card off!!

Best wishes

Aunty Margaret

Tondella

Thanks Aunty Margaret

MS are offering a free 90 day trial of their Money deluxe program so I have downloaded it

If anyone else is interested just follow the link:


http://www.microsoft.com/money/freetrial_info.mspx

Tondella

sophiedb

hello! Just a random thought on the wedding thing - I know they can be pricey (oh yes) so I won't comment on the overall budget, but one way that we saved on ours last year was to postpone the honeymoon!

Obviously we'd much rather have had it at the same time, but settled for three nights in a gorgeous B&B instead. Our current plan is to do the "real thing" in Dec 2006, motorcycling our way round New Zealand via campsites and relatives (neither of us likes pillioning, so we want two bikes). In the meantime we've now managed to buy our first home and fund a spell of part-time work for hubby to complete his HND, so it's worth the wait as far as we're concerned.

Tondella

Wow! biking around NZ sounds great!

We're going to go ahead and have a honeymoon, but rather than make it an experience of a lifetime we'll just settle for one week somewhere sunny. With the measures we are currently taking to pay off the debt it should only be two years before we're debt free. We reasoned that they'll be plenty of opportunities then and in the future to travel farther afield and so we'll treat ourselves then.

The wedding budget is currently down to £7.5k, incl £750 fudge factor. I plan to get it down to £6k, however it's alll hypothetical at the moment as it's only in September next year and so the only confirmed costs are the venue and civil ceremony fees. I'll definitely be keeping my eye on the spends as the year progresses. Having read the MSE wedding thread we've decided to go down the route of getting the best value for money on the essentials, rather than trying to go for the cheapest wedding ever.

margaretclare

Hi Tondella

We actually had what might be called 'the honeymoon' before the wedding!

2 weeks after 9/11 we took off for our planned 'big trip' to the USA and Canada. This included visiting friends and relatives in different parts, from the Mid-West to the Pacific Northwest and into Canada, then across to Washington DC. It included a 3-night trip by train from Chicago to Seattle. In 3 different places B had his ear bent by friends/relatives about why he didn't want to get married. He changed his views when we got home and we actually did get married in mid-January. But we couldn't afford another honeymoon then, I wanted one because with 3 previous marriages between us, neither of us had ever had a honeymoon before! So we booked a 3-night stay in a 200-year old pub in the Cotswolds - Cotswolds because I'd never been there before and B had only been through at great speed while on business!

Aunty Margaret

Tondella

Hi Guys

Just thought I should post an update on how things are going after all your good advice.
1) existing debt, which if you remember was mainly credit card based, I have got this down from an average APR of 14.9% to an average of 5.5%APR, which means that we can really maximise the effect of our repayments. We still have a consolidation loan which will run till July 2007 and which I don't think we have much of a chance of getting rid of early, although we'll be looking into that this weekend
2) budgeting: we have both done budget and really cut back our optional spending plus minimised all compulsory outgoings. Particularly proud of getting OH's tariff down from £55 to £15 per month with no reduction in minutes or texts and with an upgrade. Having trouble selling the motorbike though, which is a pain. Set up all the direct debits and run it all through the snowball calculator, and with current repayments we should be debt free by Nov 2008, which feels like a lifetime away.

Despite really getting behind this debt and tackling it, after sitting down last night and calculating our debt free day I just felt desperate. I'm living in London and my career will be keeping me here probably until 2010. So that's three more years of scraping by in overpriced accommodation while all my friends are enjoying nice dinners in restaurants, holidaying and travelling, shopping. I'm now looking at moving out of my current flat and into a flatshare in order to free up another £200 per month and there's a strong possibility that I'll still be flatsharing after we're married because OH works and lives away. I do take joy in doing simple things, like going for walks, running in the park, and I don't often go out drinking etc, but the inability for us to say, oh let's blow it and treat ourselves to a nice meal out, once in a while for the next three years is really tough to take. To top it all off, turns out OH spent on the credit card the other week, fortunately it was one that didn't have a BT deal on it, but I was really gutted especially after stressing to him that we had to live on our budgets. It was for his SIL's birthday present, but still, the reason he couldn't afford to pay by cash is because he had spent it all beforehand. He needs to have his bills going to his address for his credit record, but I don't think he is going to stick to his budget. I feel so desperate because I feel I have made so many cut-backs to make this work.

Just needed to blow off steam about the frustration of having to sit back and wait for the debt to decrease. I know most of you have been through/are going through the same, but I guess we've all been depressed by it at some point.

nadnad

I've just read the whole way through this thread Tondella and I just wanted to congratulate you for what you're doing. I hope your OH gets round to your way of thinking it will make things a lot easier for you in the long run. I don't think I can give you any more advice - you know what you need to do its just a matter of doing it.

Your last post struck home with me becase although me and my OH aren't in "bad" debt as such (all manageable) a £10K loan with 4 years left and £2K on credit cards, we are having to save like demons to build our new house - which should be starting next year. In the meantime we have large mortgage payments (our present house and mortgage for the land) and we need to save £30K by next December (for some of the build)!! It means that we are saving every penny and it does get you down sometimes when you don't go out for a meal cos you feel guilty, or you don't buy a little top for the same reason. But you do get into the mindset of saving and budgeting and it all pays off in the end. Your debt free date isn't really that long away, you'll get there in the end and just think the harder you work at reducing the debt the quicker that date will come around.

A little word on your wedding - the reason we have the loan is becase we were getting married and wanted to do our house up as well - never a pair to do things in a small way. Anyway we had saved about £6K and needed the rest for various things - we went away for our wedding for a month to Mexico and USA and it was the best experience. We also had a party when we came home, then we redid our bathroom, and various bits and pieces in the house. But can I say that I would never forgo the amount we spent on our wedding - it was the most special day of our lives and I agree with you about the photos - theres nothing better than professional shots. Its your day and you should have it how you want it.

Anyway lots of good luck for the future and I hope you get where you need to be (financially)! Keep us updated on your progress, and maybe you should show your OH this thread - it might make him open up a bit and he might come around to the MSE way of thinking!!