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Got myself into a mess and I want to get myself out
Needachange
Posts: 1 Newbie
Hello
So as the title suggests I've managed to get myself into a but of a mess debt wise and could really use some advice on the best way to turn things around.
So I have about £8000 of debt. Split across a number of credit cards and one store card, they are split up below
Card 1- £3000 outstanding, 0% until Nov 18
Card 2 - £3200 outstanding balance, roughly 20% interest
Card 3 - £300 outstanding, about 30% interest
Card 4 - £200 outstanding, about 25% interest
Store card £1400 - roughly 30% interest
I'd rather not get into how I got here, I made mistakes I'm not proud of and I really want to get myself out of it as soon as can.
After my bills and general living costs I'm left with about £420 per month. Not including the minimum payments for the above debts after which I have about £190. This is every last penny I have left after my bills.
Ideally I would like to get myself out of this mess without defaulting on any of the debts. I'm having no trouble making minimum payments but I feel like I'm trapped there.
Can anyone please give me any advice on the best and fastest way to clear these off without causing major damage to my credit file.i would really appreciate it.
So as the title suggests I've managed to get myself into a but of a mess debt wise and could really use some advice on the best way to turn things around.
So I have about £8000 of debt. Split across a number of credit cards and one store card, they are split up below
Card 1- £3000 outstanding, 0% until Nov 18
Card 2 - £3200 outstanding balance, roughly 20% interest
Card 3 - £300 outstanding, about 30% interest
Card 4 - £200 outstanding, about 25% interest
Store card £1400 - roughly 30% interest
I'd rather not get into how I got here, I made mistakes I'm not proud of and I really want to get myself out of it as soon as can.
After my bills and general living costs I'm left with about £420 per month. Not including the minimum payments for the above debts after which I have about £190. This is every last penny I have left after my bills.
Ideally I would like to get myself out of this mess without defaulting on any of the debts. I'm having no trouble making minimum payments but I feel like I'm trapped there.
Can anyone please give me any advice on the best and fastest way to clear these off without causing major damage to my credit file.i would really appreciate it.
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Comments
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First step is to post an SOA (link below), and let the members see exactly where you stand.
We'll then be able to give precise advice.
http://www.stoozing.com/calculator/soa.php
In the meantime, as a general rule, you should be hitting the highest APR debts (in your case the 30% ones) hard, while making minimum payments on the rest.
You should also immediately stop using the cards.0 -
I second the SOA, lots of people will offer help in possible areas to cut. Nobody is here to judge you and your reasons for being here, we are all here for the same reason and are here for support and advice.Change the way you see things and the things you see will change0
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I'd use the snowball method ( check out Dave Ramsey). If you are really strict then 2 of those cards could be wiped off in a month. Chop the cards up and close the accounts so you are not tempted again.
You have spare money and your total debt isn't extreme so I think you can easily get rid of it. Posting you bills can help people advise on ways to cut back. Its important to know exactly what goes where. Make a plan each month before you get paid.0 -
I suggest you try to do Dave Ramsey's snow balling your debts. Pay minimum payments on each of your debts and try to pay off your smallest debt. This one would be card 4. Once that £200 is paid back you can do the same for card 3.
It will take you lots more time to pay off your £1400 store card. When that is gone get rid slowly of your card 1 and lastly card 2. Good luck.0 -
Fireflyaway wrote: »I'd use the snowball method ( check out Dave Ramsey). If you are really strict then 2 of those cards could be wiped off in a month. Chop the cards up and close the accounts so you are not tempted again.
You have spare money and your total debt isn't extreme so I think you can easily get rid of it. Posting you bills can help people advise on ways to cut back. Its important to know exactly what goes where. Make a plan each month before you get paid.
Definitely agree with these two posters. Snowballing works. There are videos on YouTube which explain this. As Dave Ramsey says it may be counter to the logic that says pay off the highest interest rate first but if logic worked folk would get out of debt quicker.Maximum_Saving wrote: »I suggest you try to do Dave Ramsey's snow balling your debts. Pay minimum payments on each of your debts and try to pay off your smallest debt. This one would be card 4. Once that £200 is paid back you can do the same for card 3.
It will take you lots more time to pay off your £1400 store card. When that is gone get rid slowly of your card 1 and lastly card 2. Good luck.
So the order you would pay is £200, £300, £1400, £3000 and finally £3200.Paid off the last of my unsecured debts in 2016. Then saved up and bought a property. Current aim is to pay off my mortgage as early as possible. Currently over paying every month. Mortgage due to be paid off in 2036 hoping to get it paid off much earlier. Set up my own bespoke spreadsheet to manage my money.0 -
Maximum_Saving wrote: »Pay minimum payments on each of your debts and try to pay off your smallest debt. This one would be card 4.
I disagree.
Card 4 has a lower APR, and a small balance, so isn't costing much.
The Store Card has a higher APR, and a big balance, so is costing a lot in interest.0 -
Bedsit_Bob wrote: »I disagree.
Card 4 has a lower APR, and a small balance, so isn't costing much.
The Store Card has a higher APR, and a big balance, so is costing a lot in interest.
This is one of the problems that seems to be emerging now - people are meaning 2 different things by "Snowballing" - the method we've traditionally advocated here involves paying off the debts with the highest interest rates first, then moving on to the next highest. however there is a new school of thought which suggests shifting the smallest debts first. Personally I think this can be a bit short sighted, particularly when there are 30% and higher rates involved! I would however suggest that where there are small balances that can be got shot of in a single month's payment, it may make sense to clear those first as it can make the whole picture look clearer if there are less tiny little debts kicking about.🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
£100k barrier broken 1/4/25
Balance as at 31/08/25 = £ 95,450.00. Balance as at 31/12/25 = £ 91,100.00
SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her0 -
We don't have exact details, about what the OP is currently paying to his/her debts, hence why I suggested posting an SOA.
However, let's assume, for an example, the OP is paying 1.5% of the balance, per month.
Also, let's assume he/she decides to put an extra £50 toward the debts.
Working only with cards 3, 4 and Store Card, this is what we get.
Paying them in APR order (ie. paying the highest APR first), will take 36 months, and cost £894 in interest.
Paying them in balance order (ie. the lowest balance first), will take 37 months, and cost £934 in interest.
Why would you want to be in debt for an extra month, and pay £40 for the privilege :huh:0 -
If this is my debt, I would focus on paying any spare money into the debts which have the highest APR while ensuring to meet minimum payments on all others:
Pay Store Card first - this has one of the highest APRs and a considerable debt remaining, hopefully by time you settle this you should have minimal amounts to pay on cards 3&4 but what are your minimum payments out of interest (percentage wise?)
Then i would tackle Card 2 until settled, then Card 1 last as this has no interest so the cost of borrowing is zero as long as the minimum is paid - however, what is the rate on this card after the 0% period?
Have you tried to get a balance transfer card for your debt? I know there are cards available which will transfer your debt to 0% over a period of time for a low fee (i've seen one for 3.4%)0 -
I thought the same, however, if you focus on paying those then you won't have paid much of card 1 which is interest free at the moment, but in 11 months you will get bumped onto a higher rate (for example, my 0% card would go up to 17.48%, but the OPs rate may be much higher than mine) so that's something to take into consideration.Bedsit_Bob wrote: »We don't have exact details, about what the OP is currently paying to his/her debts, hence why I suggested posting an SOA.
However, let's assume, for an example, the OP is paying 1.5% of the balance, per month.
Also, let's assume he/she decides to put an extra £50 toward the debts.
Working only with cards 3, 4 and Store Card, this is what we get.
Paying them in APR order (ie. paying the highest APR first), will take 36 months, and cost £894 in interest.
Paying them in balance order (ie. the lowest balance first), will take 37 months, and cost £934 in interest.
Why would you want to be in debt for an extra month, and pay £40 for the privilege :huh:0
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