A question about : Advice appreciated-I'm determined to be debt free!
Hi all,
I have used this site for some time now for information and help with my finances. I have also bought and read Martins book.
Unfortunately I am a woman with debt – a lot of debt – and I am working hard to get rid of it. I have moved money about as much as possible to 0% cards, low interest loans etc but the system is starting to fail me now as I can’t get credit so easily. I wondered if anyone here could advise me. I’m not being lazy but I think that I need fresh eyes to look at this as I am just going round in circles weighing up what to do next. I have read the book and I know the general rules but now the book is packed away in a box (I recently moved house!) until I get it out and I just don’t know what to do next. Here is the list of debts: (please bear in mind that when I started out making all this better after graduating I owed over Ј20k so I am chipping away at it…)
· Egg Loan - Ј13,451k outstanding at 7.9% – payments are Ј300 per month
· RBS card – 0% rate just ended, balance is Ј3200 – I pay around Ј90 per month. Limit on the card is Ј4400. I don’t know the new interest rate but my last minimum payment was Ј76 of which Ј47 was estimated interest.
· FD card – 0% rate also just ended, and I am now paying the minimum payment of Ј30 per month. The balance is Ј900 and the limit is Ј1000. Again I don’t know the interest rate.
· Barclaycard – I have 0% until September 2005. My balance is Ј300 and I usually send about Ј20 per month. The limit is Ј560
· I also have an overdraft of Ј1000 and I pay roughly Ј8.00 per month interest to have this
I earn just over Ј25k and take home around Ј1450 per month.
Other outgoings are:
Ј670 mortgage and bills etc
Mobile never exceeds Ј30
Petrol Ј60 max
I have applied for other 0% credit cards but have been refused a couple of times now. I have recently bought a house so could that have something to do with my credit rating? Its rare that I miss payments but it has happened a couple of times in the past year so I guess that is more likely to be it.
Anyway – I feel I have a few options:
1. The Egg loan is a flexible loan so I can take 3 payment holidays a year and could use this to take chunks off other debt?
2. See if Egg will take on all the debt at the same rate so I just pay one person.
3. Apply for 0% or a low life of balance credit card.
I just don’t know. I keep weighing it up but never coming to a decision. In terms of priority I see that the credit cards, the RBS one in particular, are the ones that need dealing with immediately as I feel the overdraft isn’t a huge interest payment and the loan just carries on month by month. The credit cards are what are on my mind the most.
The other day I had a ‘special invitation’ card information thing through from Morgan Stanley – am I more likely to get this or am I being thick and naпve if I believe the ‘pre-selected’ thing?
I budget for everything (I have recently made use of the MSE budgeting spreadsheet) that I do buy - which isn’t a lot - and I never spend on the credit cards anymore and have been better off in cash terms since buying the house even though I have no spare income! This is probably because my boyf is so good with money. Usually I would be in a right mess this time of year (i.e. using the credit cards to get me through the month) but this Christmas I did everything as cheaply as possible over a longer timeframe and I should be ok (although right up to my od limit) until payday.
I save Ј100 per month in a high interest savings account. Even though my situation is dire I still feel that to live just to pay debts and bills is depressing so my one extravagance most years (not every year – certainly not last year due to buying a house) is to book a holiday and a budget one at that. Currently I have Ј300 in the savings account which ideally I would like to preserve although I appreciate saving alongside paying debts is not encouraged!
Sorry if I’ve waffled and if anyone has read this I would be really grateful for your advice. I truly am looking forward to debt free days and I am committed to doing this. I just want to know the best way of doing it.
Many thanks in hope of your advice.
HP
Best answers:
- first off welcome to the board.... ;D
secondly, if you could find out and post the interest rates for the other cards, that will enable us to have a clearer picture and then being able to make some suggestions
the possible refusal could be due to your new address, it might also be due to the cards/loans/overdraft you already have.
if you have been refused for credit in the past month, then dont apply for any more.
check out the t's n c's on the payment holiday with egg, how long can you take this or is it 3 monthly payments. - Thank you very much.
I will go off and check the interest rates and post them up later. As for the Egg thing its a maximum of 3 months in a year that you can take a holiday and not make the monthly payment. These can be consecutive months or separate across the year.
I really appreciate your time. - Okey doke Harriett, let's take a look at this:-
Quote: - Some excellent analysis there, WP. I know whom to turn to, when a friend of mine comes to me with debt-related problems in future !!!
- Wow - Western Promise - are you my guardian angel? Will you marry me? ;D Just joking...
In seriousness thank you so much for that, I didn't expect such a reply and just from reading it through once its ordering things in my messy head. I'm really grateful.
I have had a look and found out that my Barclaycard is definately 0% until September, the RBS is 17.9% and the First Direct is 15.9%.
You are right about the budgeting side of things and there are things I haven't accounted for here. I have counted for them in the budgeting tool though so I will finish that off and see where it leaves me month by month. I do, however, regularly use this site to ensure that I am getting the best deal on things like bills, insurances and general expenditure. I got last years MOT free, (dont know why - Peugeot just offered it to me!) but I doubt that will happen again, and I work in a school so I get a dodgy, but free, school meal each day!
I will read your reply again as I need to prioritise and work out what to do first. First thoughts - would it be good to do as you say and get rid of that Barclaycard with the savings and then move some of the RBS over to it? Then what about taking payment holidays from the Egg loan and getting rid of the First Direct card in the next three months - or should I concentrate on reducing the RBS because of the high interest rate?
I really appreciate your help. Its a real eye opener to have someone else's view on the situation. I am so going to do this!! - Can I just add something into the equation about the FD CC.
I have one and unless you spend Ј1200 p.a on it you are charged Ј20 for having it.
I'm pretty sure that they count the year from the date you first tookout the card.
If you are within your dates of a year and not going to be charged this Ј20 then fine but if not shouldn't the OP be taking this into account when deciding which debts to clear first ??? - Shucks... all the best ones are always taken...
Ok I'm going to press on with that first step and pay off the BCard with whats in my savings then move a chunk of the RBS over to BCard.
And get this, last night I came home to a letter from RBS informing me that my credit limit has been raised to Ј5800!!! They make it so easy to get into more debt...
Just a query - is it worth asking BCard if they would like to increase my limit to take advantage of the 0% or would that constitute a further credit check?
Many many thanks for all of your support. I will keep posting progress on here if its ok. It will really motivate me to do that and it will also demonstrate to me that I am making some progress! Sometimes it doesnt feel like its moving at all!
HP - Sorry Spendless didn't see your post. I took out the card about a year ago so I will double check what you have said and find out if I am going to get a charge for having the card.
Thanks for that
HP - Harriet Potter- I'm just looking at my FD CC Statements and Septembers says
"To Use your card for free you need to spend Ј1200 a year"
BUT it doesn't say it on November or Decembers Statement (Octobers is missing!)
So i'm now not sure if it's changed or not. In September we had already spent more than Ј1200 on it so it's not because we were under this amount.
If anyone knows will they post or i'll ask FD next time i ring and post the reply - Ha - Found my own answer ;D
Turning over Decembers statement and reading the small print on the back :. It says under
Charges
Annual Fee- An annual Low Usuage fee of Ј20 per annum will be payable if purchases (not including refunds,interest,cash advances,foreign currency and travellers cheques) totalling Ј1200 have not been debited to the account during the previous year.
So it looks like they've stopped warning people of this on the front of the statement >
HTH
Best wishes - Many thanks for checking that Spendless - I will do as WP suggests above and get rid of the FD first as he says it will cost the same with the charge as the RBS is costing - then I can crack on with the RBS one.
Meanwhile I'm going to be brave and make a few phone calls and see if I can do a bit of shuffling like suggested as well. I'll get there in the end!!
Many thanks
HP - Reaper - where does it say on that link that they do not charge an annual fee? I can't find anything about it.
They most definately do say on the back of my last statement that they do charge (as per my last post on here).
Mine is the Gold card. - Ignore my last post i found it.
Will be phoning them in the morning
Thanks
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