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Freezing interest on credit cards

(9 Posts)
Ijustworemytrenchcoat Wed 18-Jun-14 10:16:57

Are there any ways to get companies to o this without getting an IVA? I feel like I am taking one step forwards and two back.

I would like to sort myself out but feel like I am drowning at the moment. One of my credit cards for example has a minimum payment of £101 a month, £97 of which is interest. I used to be able to overpay each month but have been stuck on minimum payments for too long now.

Rockchick1984 Wed 18-Jun-14 11:10:18

You can do a debt management plan - it'll still wreck your credit rating though. Contact Stepchange and they will go through your income and expenditure and help you speak to creditors (they don't charge you anything).

TalkinPeace Wed 18-Jun-14 14:46:58

Cancel the direct debit.
Set up a standing order for three days before it each month for £105
you'll rattle through the debt in no time.
Come join the big thread and look at my spreadsheets to see how the magic works

Ijustworemytrenchcoat Wed 18-Jun-14 15:27:35

Thanks TalkinPeace. I will input some figures later tonight when the baby is in bed. Will have to find some statements to get the interest rates.

Just some general questions though: I have seen standing orders mentioned in preference to direct debits several times. Is this just because you are more in control with a standing order?

Also, do you mean paying just above the minimum will have an impact?

TalkinPeace Wed 18-Jun-14 15:42:25

Hi there,
yes, the standing order once set up is in YOUR control - and because it does not drop down with the balance, the amount of capital you pay off creeps up remarkably fast ...
the standing order method changes the repayment term from 18 to 2 years grin

Ijustworemytrenchcoat Wed 18-Jun-14 18:15:21

Ah I see, because the minimum payment is a percentage of the interest. I think that would be better. It is surprising how quickly my balance goes down on the credit card with the lower interest rate. It is the two with huge interest that is so depressing. I can't get a lower rate or interest free card to switch to so I am stuck.

TalkinPeace Wed 18-Jun-14 20:08:29

at high rates, the repayment differential is actually faster
I know that the banks will firebomb my house some time : I'm ready wink

Ijustworemytrenchcoat Wed 18-Jun-14 22:11:35

Really? Argh I don't understand, I just thought more of the payment would be taken up with interest. My brain doesn't work with this stuff.

One card is dwindling down ok, I have two high interest ones with high balances so will set up a standing order.

celerystalks Thu 19-Jun-14 00:29:58

My credit card providers froze the interest when I wrote to them, I think I got a sample letter off the Step Change website. I'd had to stop working due to ill health so I was able to pay a minimum of just £1 a month, which was fine for a few months. Then I got more help from Step Change and they recommended a DRO which allowed me to wipe the debt for £90, which was a huge relief. Better than slow repayments over decades! It wrecked my credit rating but it was never good anyway.

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