GULP have cut up all credit cards

[BonaDrag]

After a couple of horrific financial years, I'm nearly £8,000 in debt. (Had to live on cc).

Now after everything is paid, including food, I have £300 left. I plan on clearing £200 a month off my debts which is slow but steady. However the lifestyle changes ahead are going to be tough.

Has anyone direct experience of this and successfully managed to reduce their debts? I just want to be free of them and have given myself a schedule card by card, starting with the highest interest and working from there.

Have been shite with money for so long it's appalling.

[BonaDrag]

I meant to say an EXTRA £200 a month after the minimum payments

[Middleagedmotheroftwo]

Have you thought about consolidating all the cards onto one, either one card, or a loan? A personal loan would have a much lower interest rate.

[BonaDrag]

I am not a home owner so it's hard to get a good rate. Also my credit rating is mediocre due to having three maxed out cards. In an ideal world that would be the perfect solution- I have no defaults etc, but have been turned down for a consolidation loan unfortunately.

[MissAnnersleyismyhero]

Hi Bona although consolidation is tempting as it means you only juggle one debt, it will be over a longer time and it doesn't really change the amount you owe.
I'd say just stick to your guns and snowball the debt - pay minimum payments on all cards and throw all your available extra cash at the card with the lowest balance. Once it's cleared, close it and begin throwing all cash at the next one.
I know some people advocate paying off highest interest rates first but psychologically this way works as you get the boost of seeing you've paid off a whole debt.
I've paid off a lot this way and totally changed my spending habits (£4000 paid off one card, and have £1400 left on my last card which should be cleared by March)
I also sold loads of things on eBay and used profits to pay lump sums off the cards. Plan on car boot in early March, again proceeds will go straight to any debt.

Check out Dave Ramsey's website and Frugal Queen (she paid off £45,000 of debt in a couple of years) for ideas!

Good luck, and maybe come join us on the February Frugal thread for daily support.

[Mum2Fergus]

Hi Bona,come and join us on the 'massive debt' support thread...we're all in same boat

[working3jobs]

forums.moneysavingexpert.com/index.php



the info and advice and diarys helped me pay off all my debt.

[BonaDrag]

Oh gosh thank you for all the tips and links. The fact I'm not alone is making me feel so much better in any case.

[invicta]

Can you apply for a balance transfer card. Theis often gives you a free period for a certain amount of time to,pay off your credit card., it can save some money.

Also, work from a budget and stick to it. Remember to factor in expenses such as haircuts, birthdays, etc when you work,out how much you have to spend each week.

[AntoinetteCosway]

Just wanted to say a massive well done. Cutting up cards is a hugely important psychological step! I second looking up Dave Ramsey-also look up Debtisdum on YouTube and the debt boards on Money Saving Expert.

[Charlesroi]

Agree on paying off the lowest balance first if the interest difference isn't too big. You can then close it and hopefully improve your chances of getting a 0% card. Or pay down the highest to the next thousand and call the catd company to reduce the limit.
Good luck.

[BrownSauceSandwich]

Joining Antoinette in just saying WELL DONE! Give it a few months and you'll recognise that your £200 per month is no peanuts... You'll really see that debt ticking down

My top tip is to make that debt payment one of the first things that leaves your account each month, otherwise you'll find reasons to skip a month here and there.

[BonaDrag]

Thank you all. Today I made the first £200 payment. I feel a bit better already.

[AdoraBell]

Glad you are feeling better for having made that payment.

Well done.

[Iamnotanugget]

I owed around 5.5k when I only earnt 12.5. I'd blown it all on rubbish so had nothing to sell. I was making the minimum payments but just wanted to be debt free. I cleared the store cards first as they had the highest interest. Once I paid off the first card I used the money to make overpayments on the second. I didn't even think about when I would be debt free I was just sure it WOULD happen and it did. I stumbled when I got to about £500 as it seemed so managable that I stopped tackling it so that last bit took me nearly a year to clear!

However I learnt how to live within my means and once the debt was gone I started a savings account! Something I'd never imagined having. I still have credit cards but now I use them so I can gain points/cashback and they are paid off in full every month. A total transformation.

Good luck. Don't think about it, just do it. It feels good knowing you're tackling the situation.

[Ememem84]

After Wednesday I should hopefully be debt free (apart from mortgage). Must resist temptation to buy myself celebratory debt free treat.

It's taken a long time to get here. I owed £6k on credit cards But have almost done it.

I have done this by paying off lowest balance first. Then cancelling card while making min payments on others. Have one left and have been reducing card limit as I go.

Good luck. It'll be tough. But worth it.

[BonaDrag]

Well done to Nugget and Eme. You should feel extremely proud. Debt can seem insurmountable. I know mine feels that way but your experiences and success spurs me on. I have never been in debt before but I was also a crap saver so my plan is to save once I've paid everything off. Financial security is so fecking important.

This weekend I spent...... 37p!

That was on some stew vegetables. DD and I went for walks and to the park. We had a fantastic time.

[Iamnotanugget]

Well done! What a fantastic start. It can feel difficult maintaining your new lifestyle, especially when set backs occur. I would strongly suggest you join mum2 on the debt thread or the February (soon to be March) Frugaleers thread. Both offer support, encouragement and advice.

[Iamnotanugget]

Well done! What a fantastic start. It can feel difficult maintaining your new lifestyle, especially when set backs occur. I would strongly suggest you join mum2 on the debt thread or the February (soon to be March) Frugaleers thread. Both offer support, encouragement and advice.

[Munchkin08]

Well done x

[lljkk]

Well done x.

[AmIGoingMad]

Another well done!

I'm in the same situation and agree that I feel so much more positive for just having taken the decision to get this sorted!

I haven't a spent on credit since dec 2012 and that in itself seems like huge progress. I'm ebaying and putting any spare cash off the one with the 0% ending soonest. This will be the only positive to going back to work from mat leave as I'll be able to pay more off.

I was hoping to get a consolidation loan but they wanted 22.9% at one bank ( no credit search just existing customer stuff ) but will try again with my other bank in a few months.

Well done on making this decision and starting to take control of your finances!

[TalkinPeace]

Please do not do consolidation loans ....
the secret to clearing debt is to freeze the payments ....
plug your numbers in here
www.mumsnet.com/Talk/legal_money_matters/1987219-SPREADSHEETS-for-Debt-Control-Budgeting-Mortgages-etc