# How can I pay off credit card?



## Bonnie2013 (21 Jun 2013)

Hi all,

I would like to ask your opinion on this if I may:-

I have a credit card and owe €15,000.  At present I am paying the minimum amount and the interest is killing me.  

I have two options:- 

1. Credit card company said that if I am having difficulties in paying then they would work out a payment plan over five years without paying any interest but it would affect my credit rating.

2. "Ask to remortgage" to pay off credit card.

Anybody have any advice about the second option? Should I be honest and tell building society that its to pay off credit card? or for something else.  Is remortgaging a good idea?  I am on a fixed rate mortgage at the moment and this is my last year.

If anyone has any advice it would be very helpful.

Many thanks
Bonnie


----------



## Janet (21 Jun 2013)

The first, and obvious, question is why are you only paying the minimum?  Is it all you can afford?  Are you working?  Do you have savings?  It might be helpful for you to fill out the template from the money makeover section as people will be better able to advise you if they have more information.


----------



## Bonnie2013 (21 Jun 2013)

Hi Janet, i work full time, can only afford the minimum and have no savings


----------



## Laughahalla (30 Jun 2013)

Without having all the facts it difficult. Lifestyle changes Will be necessary. 1st.. Cut up the card, get rid of it.
Cycling to work get rid of car if possible, not going to the pub. Getting a hobby that costs nothing to replace socialising in pubs/restaurants.

Shop in aldi. Use pay as you go instead of bill pay. Get out broadband. Three offer all you can use internet as part of your 20 euro per month deal on pay as you go. If you have sky then get it out and use the free to air channels. Make your own lunch. Don't buy takeaway food. Stay away shopping centres. I.e temptation to buy stuff.


Pay in cash where possible. You don't feel yourself spending money when you use a card.Give yourself a budget to work off. If you are paying bank charges then change your bank. Keep a spending diary of everything you spend money on, no matter how trivial. 


Regarding option 2.

   I wouldn't turn unsecured dept into secured debt..


Good luck.


----------



## wbbs (30 Jun 2013)

Highly unlikely any lender will remortgage for credit card debt, that is the stuff of the boom years.


----------



## Bonnie2013 (2 Jul 2013)

Thanks for all the replies, much appreciated and all the tips for saving money


----------



## MrEarl (2 Jul 2013)

Hello Bonnie,

Laughahalla makes some very good suggestions and is entirely correct, in terms of cutting your outgoings to help repay this debt.

As correctly pointed out, the first thing you should do is cut up the card - then it cannot be used again.

The next thing you should do is write to your credit card provider, point out that you are struggling to repay the debt and ask them to lower the interest rate on the debt - perhaps see if they have a promotional rate for new customers and ask them to put you on this for a 6-9 month period.  This will ease pressure a little, in the short term, while leaving your monthly repayments at the current levels, will reduce your debt a little further.

Do you currently make pension contributions and if so, do you have the option to temporarily suspend these payments ? ... if so, consider doing so for 6 months and putting the six months pension contributions against the credit card debt, it will help.

If the credit card company will not assist you by reducing the lending rate for a period of time, I would lodge a formal complaint and thereafter, send a complaint to the Ombudsman.  While strictly speaking they don't have to reduce your rate - they do have an obligation to try and help you manage your debt with them and if it's clear that you simply cannot afford their high interest rate, then pressure can be applied on them as part of an overall arrangement.  For the sake of a couple of letters, it's time very well spend and depending on which credit card provider it is (you don't say ?) it may prove a very worthwile exercise.

An alternative strategy if you can't get a rate reduction, depending on which card provider it is, is to ensure you are on their card with the cheapest interest rate - for example: AIB, BoI, Ulster Bank & Danske all have a number of credit card products, offering different rates so press them to move you to the cheapest product.


----------



## SoylentGreen (2 Jul 2013)

Bonnie2013 said:


> I am on a fixed rate mortgage at the moment and this is my last year.



Is this the last year of your mortgage or the last year of your fixed rate mortgage? Are you moving to a variable rate mortgage at the end of the year?

At the end of the year will this free up more cash or less cash?


----------



## johnpdolan (2 Jul 2013)

Bonnie

I had a similiar problem 4 years ago. I owed €11000 after using card for wedding and then 2 months later lost my job. This is what i did. I stopped paying them anything at all. I stopped answering their calls for 6 months. I waited till the put me in the debt collection service and then i told them i was broke, had no income and in a terrible state. After a couple of months of phone calls they asked in i would be able to pay anything. I said that i might be able to sell my car but it was only worth €4000. They said they would accept that if i get it and write off the debt. We eventually agreed on €3000 and i paid that off over 3 months, €1000 a month paid in post office. I now have no credit card worrys and will never have one again. Remember you have the power to settle with them for a lower fee if you so wish


----------



## TRS30 (2 Jul 2013)

johnpdolan said:


> Bonnie
> 
> I had a similiar problem 4 years ago. I owed €11000 after using card for wedding and then 2 months later lost my job. This is what i did. I stopped paying them anything at all. I stopped answering their calls for 6 months. I waited till the put me in the debt collection service and then i told them i was broke, had no income and in a terrible state. After a couple of months of phone calls they asked in i would be able to pay anything. I said that i might be able to sell my car but it was only worth €4000. They said they would accept that if i get it and write off the debt. We eventually agreed on €3000 and i paid that off over 3 months, €1000 a month paid in post office. I now have no credit card worrys and will never have one again. Remember you have the power to settle with them for a lower fee if you so wish



However your credit rating is shot so borrowing any kind of money for the foreseeable future is going to be very difficult if not impossible.

Every action has a consequence.


----------



## TarfHead (2 Jul 2013)

If you're considering re-mortgaging to finance clearing the CC debt, then I assume that means higher repayments ? If so, you must have some capacity to pay more off the CC debt.

It all depends on circumstances. Getting clear of the loan at the higher interest rate is common sense, but it also depends on the new terms your mortgage provider will issue, e.g. come off tracker.

Paying off just the interest is keeping your head above water. You must deal with reducing the principal.


----------



## johnpdolan (2 Jul 2013)

TRS30 said:


> However your credit rating is shot so borrowing any kind of money for the foreseeable future is going to be very difficult if not impossible.
> 
> Every action has a consequence.


 

Yeah but who is going to get money from a bank or institute in the future anyway


----------



## DB74 (2 Jul 2013)

johnpdolan said:


> Yeah but who is going to get money from a bank or institute in the future anyway



People who haven't made an mess of their credit rating


----------



## TRS30 (3 Jul 2013)

db74 said:


> people who haven't made an mess of their credit rating



+1


----------



## johnpdolan (3 Jul 2013)

DB74 said:


> People who haven't made an mess of their credit rating


 

Thats all 2 of you then. The country is on its knees and the bankers are laughing at us. Credit rating my ass


----------



## TarfHead (3 Jul 2013)

johnpdolan said:


> Thats all 2 of you then. The country is on its knees and the bankers are laughing at us. Credit rating my ass


 
Make that 3 .

Burning your credit rating is a decision that could cause your future self to want to tavel back in time to give your present self a kick up the .. .


----------



## Bonnie2013 (4 Jul 2013)

Hi guys, its the last year of my fixed rate. Decided to go with neither option in the end. Just going to watch every penny and try to pay off as much as i can. Thanks for all the tips


----------



## dub_nerd (4 Jul 2013)

johnpdolan said:


> The country is on its knees and the bankers are laughing at us.


So are the strategic defaulters who feel entitled to make the rest of us pay their debts.


----------



## Gerry Canning (5 Jul 2013)

dub_nerd said:


> So are the strategic defaulters who feel entitled to make the rest of us pay their debts.


I hear you and you make a HARD valid point.

In fairness a lot of people are NOT strategic , it is ,they are in a 5 year bubble and unless issue is resolved , they are no good in any way to themselves or our economy..
My opinion ,is that the (Professional) Banks lent multiples of what was sensibly affordable in the fluffy times.
If that means a settlement ends up as sensible compromise then so be it !! {I know we will get hit for some strategic defaulters} Surely the worst Strategic Defaulters have gone down the uk bankruptcy route already? Just the little guys are left ?

Shooting their credit rating is blunt ,eg Lad had a carpentry business , bust takes him out owing k30. He settles for K6 and is a genuine case.Do we really want the movers starved of credit ?

This is ONE BIG AWKWARD issue !!


----------



## newdawn (22 Aug 2013)

Question for Johnpdolan re getting a settlement on a big credit card debt: were you not terrified getting all the calls and letters? Also, did any collector call to your house? Was the debt being collected by the credit card provider or had they passed it to a collection agency?  Sorry for the 20 questions but I'm trying to manage a big card debt myself and not sure how to progress with it.


----------



## quadrangle (8 Oct 2013)

How long does it take to regain a credit rating with a clean slate after a breach like that?


----------



## so-crates (8 Oct 2013)

From the ICB website (and multiple posts here) 5 years after the loan is closed by the lender.


----------

