Struggling with debt? Ask a stepchange debt adviser a question

Hi

Welcome to the forum.

It sounds as though you’re in a good position in terms of manageable ways to clear the debt but the decision would ultimately be up to you, there isn’t really a best practice. You could sell the shares and clear the debt, this could be a particularly good idea if you’re struggling to clear the debt by using your monthly income. However, if you can use your surplus monthly income to clear the debt within the 0% interest time frame, then you might decide to keep the shares for your future. As I’m not a financial advisor I can’t give you advice regarding the shares or the best way to manage them long term, this is something you’d have to decide on yourself or with advice from a financial advisor.

Thanks
Rachael

movingtimes wrote: »

Unsure if in right place but have a basic question regarding my credit cards. I have four credit cards,all on 0% interest, total balance on all of these is around the £10k mark. I also have company shares that total well above the £10k mark. Is it considered best practice to sell the shares to clear the debt or is this OK whilst I'm on 0% on the cards?

Hi

Welcome to the forum.

From what you’ve mentioned it sounds as though you’re in a good financial position now and it’s good to hear that you’ve taken the time out to plan for your future. I appreciate it can be difficult to stick with a budget and payments to creditors, especially when there are multiple creditors and multiple payments going out.

As you’ve mentioned the minimum payments aren’t a problem, I’d recommend the next thing to consider is making sure you’re paying as little interest as possible. It might take a bit of time to work out but I’d consider checking when the 0% interest rates finish and when they will increase and what amount to. A personal loan can be a good option for some people, however it also depends on the interest rate. You’d need to see if it’s going to be quicker and cheaper to pay back on your current cards with the increase in interest or if a personal loan would be a cheaper borrowing option. As far as I’m aware there are facilities where you can check your eligibility in a soft search for products, which shouldn't impact your credit file, multiple application for credit will impact your credit file.

You’ve not mentioned how long your mortgage agreement is but I’d recommend making sure that your financial plan will make sure that if you do plan to pay the unsecured debt first, that the time frame to pay back the capital on the mortgage is realistic.

Thanks
Rachael

Laverys wrote: »

Folks


New to this, hopefully I am sending to the correct place. We have credit / car loans at various rates, with various changes in terms of when some of these will change from 0% to standard rate, apologies for any info missing (emailing quickly while on lunch)


We are currently paying £935 but are in a batter financial position than we were so I was thinking of getting a loan / money transfer in January and paying off all below and merging into one payment around £1k per month which would be paid off in 2 years, rather than current position which means they are paid off at different times.




I am asking, is this wise (we are totally ok with paying £1k per month), the main reason for doing this is we have interest only mortgage with negative equity and once we finish paying loans we are going to start to use this money (£1k per month) to pay off our mortgage.


We have had it tight for a few years as we released equity when the market crashed and bought other properties that are just turning into almost positive equity, but our most important goal is paying off our mortgage


Any advice on this and possible ways would be appreciated


CARD OWED MONTHLY APPROX END DATE Tesco Loan 7,179 200 Nov-22 M & S (credit Cards)– 0% rate ends Sept 21 - loan will be clear by then 4159 200 Sep-21 Santander ( credit Cards) 0% rate ends 13 feb 21 would leave approx £625 owed 3550 225 May-21 Virgin ( credit Cards)
0%
3,626 150 Oct-21 MBNA (credit card 0%) – rate changes 8 feb 2021 would leave approx. £1600 2420 50 Aug-24 YP Loan 4.8% 4460 110 Aug-23 Total 25,394 935

Hi

Thanks for messaging and welcome to the forum.

I can’t advise you as a financial advisor but prioritising paying your debt as cheaply as possible is always a good thing. It might be worth stopping trying to balance transfer the 0% credit cards before the time to pay at this rate is up, as you’ve said this is affecting you being able to consider this option in the future.

It's good to have an emergency fund, in case something unexpected comes up but it might be worth using any other available surplus at the end of the month and putting it towards paying back the debt as a priority, especially as you’re concerned about interest being added before you’d be able to clear the debt within the 0% interest time frame.

Deciding whether to use your shares isn’t really something I’d be able to advise on as it’s a personal decision. Some peoples main aim will be to pay the debt asap and be happy to cash in shares to do that, whereas others would feel more comfortable having some savings in shares for the future while slowly paying back debt.

You might find you can free up money by budgeting your expenses and cutting back on any extras or by finding cheaper alternatives, that would help reduce the debt total quicker. For example looking into trying to reduce contracts, gas/electric supplies, bulk buying etc.

If you ever feel the minimum payments are a struggle or you’re using the credit to pay for living costs, even if you’re maintaining the contractual payments, at this point I’d recommend accessing some debt advice, from a free service like us at StepChange.


Thanks
Rachael

Magepl wrote: »

Hi, first time poster and first time asking anyone with experience for any help with this.

I’m 31, currently have just over £14,000 In debt, all on 0% credit cards which don’t expire for a while - once they do my plan is to switch to another balance transfer 0% card. I am paying off the minimums each month and have never missed a payment. My credit rating is currently poor due to too frequently applying for a better deal on the 0% balance transfer credit cards.

I don’t have much in the way of savings, I have approx $1500 in shares through the company I work for which comes out of my wage, I have a pension accumulating through my work and also try and save £25 a week into a lifetime ISA for my first house.

My struggle is that after rent and all these credit card payments are taken out, I don’t have much disposable income left over.

I am currently searching for a better paid job.

Is there a better/quicker way to clear this debt? Do I cash out my shares to help clear the debt?

Thanks in advance for any help and advice, it’s much appreciated.