Key Post: credit card trouble

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gerard17023

Guest
hi everyone
could someone please tell me the best way to tackle credit card balance. i owe 9600euro and dont know how to clear it
i dont really want to get top up on mortgage as i am about to enter tracker with (iib). outstanding mortgage is 102,500 euro. no car loan
take home pay=550 p.w
wife take home=105 p.w
i was thinking about credit union but have not much savings there
 
R

Roy

Guest
credit card problems

Is your main problem that you don't have a lot of spare cash around and you're over reliant on your card ?

The very first thing to do is to cut up that card or at the very least give it to someone reliable to look after it

You could try and talk the credit card company if they would suspend the interst charges but could go against you in later years

Find out what sort of interest you are paying on the card ,( that should shock you ) If you have any savings at all look at this interest rate . use the savings to pay off some of the debt ( there is no point in having savings at say 1% if you're paying 16-18 % on a credit card . go to your credit union or bank and see how much of a loan they will give you , get the repayment stopped out of your wages if possible direct to the credit union or if not a DD the day your wages go into the bank
don't be tempted to increase your mortgage as you will end up paying this debt for years and you will probably go down the wrong road again . You need to tackle this the hard way and learn a lesson that keeps you out of debt , I know it happened to me so don't feel stupid or depressed the consumeristic (?)society we live in today has a lot to answer for Say to yourself that you're going to tackle it NOW

You are then going to have to sit down and see if A) you can increase your earnings
or more likely
B) decrease your outgoings
and use this to pay the loan

I know that this sounds rather simplified but it worked for me

If you want to post details of your outgoings and see if we can help you reduce them on AAM and get you bad debt free .Its hard but you need to change your attitude to spending
#

for instance I owed a hell of a lot more than you but now 5 years later the only debt I have is my mortgage on a rental property and |I have a few bob in the bank

However I have to say a BIG thanks to all on AAM for the fantastic advice

I'm going to stop there because I'm starting to sound like Alvin or Eddie
good luck keep us posted
 
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High Roller

Guest
Borrowing, Banking and Credit Cards

You could consider transferring your CC balance to another card company who will give you a low interest introductory offer. This might give you some short term relief.
 
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Guest

Guest
credit card problems

This link might be of interest. However if you have ongoing and pathological problems with managing credit card and other debt then a more radical approach to rectifying the problem both on a short and longer term basis may be required.

www.askaboutmoney.com/clu...EDIT_CARDS
 
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gerard17023

Guest
Re: credit card problems

hi roy
sorry in delay in replying. thank you and all people who took time to respond .i just want to say that i am responsible in most things.i dont drink or smoke and go out only occasionally and we have 4 school going kids so i need not tell you about expense of that. i intially went to "MABS" and gave them my overall picture.they recommended using my current account only for DD'S IE MORTGAGE, LIFE COVER etc.i had a balance of 1300euro on a card and they told me contact another company which i did. unfortunately the new people gave me a credit of 7500 and of course i screwed up. i saw the chance of a great deal on a holiday and you guessed used the new balance out there and of course never kept proper track and now the mess.this was my own fault and i own up fully to that and i promise to sort things out so please help me as i am sincere and also be patient with me and keep everything simple as i am not too hot on computers
 
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Guest

Guest
Re: credit card problems

> i intially went to "MABS" and gave them my overall picture...i had a balance of 1300euro on a card and they told me contact another company which i did.

What do you mean? They told you to transfer the CC balance to another provider with a lower (introductory or ongoing) rate?

In my opinion you need to get rid of the credit card NOW as you obviously cannot manage it properly (no offence intended but it's essential to call a spade a spade in situations such as this).

Perhaps you could top-up your mortgage to pay off the credit card balance and preferable arrange for the top-up to paid over a shorter term than the bulk of the mortgage (e.g. don't consolidate otherwise short term loans onto a mortgage and pay them over the full term as you will probably end up paying a lot more in the long run). Such loan consolidation should generally be viewed as a once off approach to rectifying serious debt problems so don't use it as an excuse to go on another spending spree once the CC debt burden is lifted.

Did you read the links posted above? They're full of useful advice on this issue.
 
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gerard17023

Guest
Re: credit card problems

i have read the advice and i wonder would they give me a top up. i got 2 top ups before for house improvements .at the moment we are spending over 200 euro out of childrens allowance to try and tackle this debt .i have not used the card this month and the other day my accountant said we would be better off putting childrens allowance into government savings earning 25% instead of paying near 20% on the card. he also suggested putting on the mortgage in fact he mentioned go for 15000 and put remainder in an account locked away in some short term deal but still possible to access for real emergency. by the way no offence taken from previous poster i know i need to wise up and i think i have taken first step by ignoring card this month
please keep writing
yours in creditness
gerard17023
 
M

Murt10

Guest
Re: credit card problems

I think I'd change accountants if he came up with advice like this.

The 25% is a once off payment and goes straight into your SSIA account which is earning probably at most 2 -3 % pa. The CC Card debt will rise by 20% this year and a further 20% next year and on and on. You will not be able to cash your SSIA in for at least another two years.

I also agree with . Get rid of the CC. The fact that you have got two top ups on your mortgage already and took your CC debt from 1300 to 7500 just because you were offered it to me indicates that the temptation to is going to be very hard for you to deal with.

Why put temptation in your own way.

Murt
 
J

Janet

Guest
Re: credit card problems

If you are really determined to keep the card though make sure that you reduce the limit to a much smaller amount.
 
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gerard17023

Guest
Re: credit card problems

hi everyone
thanks for all the advice. i know i must get rid of card but will someone please tell me how to go about getting this paid off
,should i get a top-up on mortgage,should i get cu loan or what should i do .i am also paying protection on my account at0.76 cents per 100 euro borrowed.should i stop this. all advice gratefully received
yours truly
gerard
 
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rainyday

Guest
Re: credit card problems

please tell me how to go about getting this paid off
,should i get a top-up on mortgage,should i get cu loan or what should i do
Hi Gerard - There is no black/white right/wrong answer to this. Several people have given their views on the solutions. You need to absorb & understand these & make your own decision.

The danger of getting a top-up mortgage is that you end up paying interest over a long-period for short term purchases. You may well run up further credit card debts again.

A CU loan would involve higher interest rates but over a shorter period.

If you are having serious trouble spending, you really need to stop, take control, build a budget plan & stick to it. If you are not able to take control, hand over all your finances to some else who will take control.

i am also paying protection on my account at0.76 cents per 100 euro borrowed.should i stop this.
Probably yes - but again, you need to think about this yourself & make a decision for your own circumstances. We have no idea how secure your employment is, so we can't decide whether you really need this cover.
 
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Guest

Guest
Re: credit card problems

> If you are having serious trouble spending, you really need to stop, take control, build a budget plan & stick to it. If you are not able to take control, hand over all your finances to some else who will take control.

Sounds to me like another trip to MABS may be in order...
 
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gerard17023

Guest
Re: credit card problems

hi folks
this is the plan my wife and i came up with
1.no top-up because temptation might still be there to run up another debt
2. no credit union help either as i need to learn hard lesson
3.right this is it,first i was paying 726euro on mortgage this is now down to 635 euro due to switch to tracker 3% 17 years to go balance= 102,500
726-635= 91 euro saved(tracker starts sept so used to paying 726 so no issue there
next finished loan of 155 euro in june and have managed to hold 50 euro weekly since
we are going to pay 200 euro monthly from childrens allowance
finally i will chance getting rid of insurance so as to maximise drop as i am with multi national company for many years (17)

91+155+200= 446 per month

debt=7400 on one card+1400 on the other

question folks do i concentrate on bigger amount first and only pay min.balance on small bill or mix/match thus giving boost when one gone(small one)

finally finally i intend to ensure that cc company reduce limit every 500 euro drop i make thus ensuring no return to black days.i think this plan will work do you agree fellow writers. please feel free to pick holes in my plan because it is only with different advice and angles that the best plan will be hatched. let this be the challenge to all you financial whizz kids and you the cautiou ones
LETS GET GERARD OUT OF THE RED AND PUT THOSE CARD TO BED
GOODNIGHT AND THANKS PLEASE STAY IN TOUCH
YOURS IN DEBT



GERARD17023
 
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Guest

Guest
credit card problems

Congratulations on taking steps to tackle your situation.

> finally i will chance getting rid of insurance so as to maximise drop as i am with multi national company for many years (17)

I presume that you mean mortgage REPAYMENT protection insurance and not something else such as house buildings/contents insurance, mortgage protection life assurance, general life assurance etc.?

> next finished loan of 155 euro in june and have managed to hold 50 euro weekly since we are going to pay 200 euro monthly from childrens allowance

I don't understand this. If you have an additional €155 available per month then where did the other €95 go? And what specifically are you using the €200 to pay?

> question folks do i concentrate on bigger amount first and only pay min.balance on small bill or mix/match thus giving boost when one gone(small one)

In general you should (a) try to replace expensive credit with less expensive credit if at all possible and (b) prioritise paying off the most expensive credit first (making sure that you don't totally ignore other loans such that they suddenly snowball into a larger debt).

Have you exhausted the possibilities of doing (a) through some means such as mortgag top-up or CU loan or whatever - assuming that you have the discipline not to keep doing this again and again?

> finally finally i intend to ensure that cc company reduce limit every 500 euro drop i make thus ensuring no return to black days.

You would be better off cutting up the cards now and closing the account once you have cleared the debt or replaced it with more affordable credit in my view.

Have you considered the possibility of transferring to a cheaper credit card and/or one with low or zero interest on balance transfers?

Have you considered running your DIY plan by MABS just to get some more feedback?

Could you save any money by shopping around for essential services (e.g. home insurance, car insurance, mortgage protection life assurance etc.) and perhaps foregoing non essential ones (e.g. cable TV etc.).

Are there any other lifestyle changes that you can make to save money (e.g. shop at Lidl/Aldi instead of more expensive shops, forego impulse purchases, make a packed lunch instead of buying one out etc. etc.)?

Any possibility that you can list your incomings and outgoings in a more concise and clear manner maybe?
 
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daltonr

Guest
Re: credit card problems

You would be better off cutting up the cards now and closing the account once you have cleared the debt or replaced it with more affordable credit in my view.
You can call the Credit Card Company and ask them to close the account NOW. Tell them you'll be paying off the balance over the coming months.

They'll continue to send you a statement each month with the usual minimum payment etc, but you won't be able to charge anything to the card.

As for which debt to pay off first. Some people like the psychological effect of clearing a smaller loan so that they have one less loan to deal with.

In truth the most cost effective pay to pay off loans is to throw as much as you can afford at the higher interest rate loan and pay the minimum to all others. As each loan is cleared throw whatever you were throwing at that loan at the next most expensive.

That said, there's a lot to be said for dealing with debt in a way that suits your psychology.

Here's a suggestion.
Write down how much you'll owe at the end of each month from now until the debt is gone. Each month check to see that you are keeping up, when you see the progress being made it can be very rewarding.

Set a number of milestones, when will the debt have been halved? When will the debt be completely gone? Mark these dates in a calendar and reward yourself (cheaply) if/when reach those points at the date predicted.

Finally, you need to learn to hate debt. See it as a way that the banks have of stopping you from getting wealthy and independant. Once the debt is gone save up and go an a decent holiday using saved cash. Then get down to saving an investing for the future.

I usually reccomend Alvin Hall's book "Your Money Or Your Life". It can be a good motivator. Someone here suggested getting it from the Library rather than buying.

Good luck.

-Rd
 
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