Overdraft and credit card clearance help required

A question about : Overdraft and credit card clearance help required

Hi

I have a credit card with my bank, that has a limit of Ј2700. I also have an overdraft with a limit of Ј1250. The former is almost permanently at the limit, as what I pay each month is almost all going towards interest. The latter is almost at its limit each month, as I have a number of necessary expenditures, as well as an overdraft fee. I would like to clear these down, and I would like some advice on how best to approach this.

For the past 2.5 years, my bank has been charging me Ј1 a day (30 max) per month for every day that I have been in my overdraft. Alongside my normal outgoings and my credit card debt, this has made it very challenging for me to get out of my overdraft quickly and easily.

I live in London and have opted out of using frequent public transport in favour of my bike when traveling to work. I earn a net income of Ј1085 a month. I am paying Ј110 a month for finance on a new laptop, which should be paid in full in about 6 months. I pay Ј600 per month in rent and bills. I add around Ј80 a month to my credit card, over half of which covers interest. I spend Ј100-150 on food. From the remaining balance of my net income, a monthly overdraft fee of Ј30 is taken. I am left with Ј115 per month.

I have recently received a letter from my bank, which asks if I would like to come in to discuss any changes to my financial circumstances. I would like to have a discussion so that I can arrange to get myself out of debt as swiftly and painlessly as possible.

If you have any advice on how best to deal with my debt, I would be very happy and grateful to hear it.

Many Thanks

Matt

Best answers:

• Hi
  I would work out a detailed statement of affairs to work out how much you can afford to put towards your debts in total a month.
  Really to be able to pay more off your debts you need to be looking to to see whether you can reduce any items of expenditure at all or increase your income.
  I certainly wouldn't go and see the bank until you have a full picture of your finances and what is affordable to you. If you do go in to see them I would also be cautious before agreeing any form of refinancing of these debts. They are suggesting you come prinicpally to sell you something, not to act in your best interest.
  You mention rent & bills are Ј600 - is that an inclusive amount paid in a lump, or have you just lumped the cost together for writing your post? If the latter then I would be looking through to see whether you can cut your expenditure in any area (e.g. checking for cheaper phone contracts/energy supply/insurance etc).
  Is the payment to your credit card just the minimum payment? or are you paying more than the minimum?
  This is the statement of affairs link we use - https://www.stoozing.com/calculator/soa.php
• Hi Tixy
  Thanks for your advice.
  Quote:
• It sounds rather like you are living beyond your means. The only real method of getting out of this is to either a) cut your expenditure to the bone or b) earn more. To be honest, living in London on your wage was always going to be a challenge anyway. Is there any chance of perhaps evening work to supplement your normal income?
  Also, move banks. Treat the OD as a debt and pay it off that way, rather than muddying the waters by continuing to use the account for spending.
• Given your finances you would probably struggle to be accepted for a new credit card that would offer you 0% on balance transfers.
  However you could try. You could take a look here for an indication as to whether you may be accepted - https://www.moneysavingexpert.com/cre...90#eligibility