What fools we’ve been - credit cards

[Janedoer]

Hi,

so went screwed up spectacularly! We’ve had two very expensive years of renovations to our house. In our stupidity we totally underestimated the costs. In even further stupidity we continue to overspend, using credit cards. We’ve played the 0% credit card shuffle game but it’s about to come crashing down. We fucked up and missed a loan payment and it impacted our credit files. We can now only get very high interest cards and no chance of a 0% balance transfer. This means that in February we’ll have £17k of credit card debt at 26%. This means that our current payment of 170 will be over £500. I’m sick to my stomach.

the good news is that despite the interest hike, we can afford the increase. It’s just a sickening waste of money. We were turned down for a remortgage and we’ve been advised to not apply again for at least 12 months. Probably not the best idea anyway.

were a couple of professionals with a 100k Joint salary. What utter fools we’ve been. I’m so ashamed.

I eat for less than that at Aldi for 3 kids. You’ll be ok. I really would be considering some extra work. Bar work or babysitting a couple nights a week. Could raise you an extra £400+ a month. £5/6k a year to throw at this would make you feel an awful lot better and get you in a position for the remortgage much quicker.

You need to curb the gin, and put as much as possible into paying this debt off. £150 a week is a lot, you can definitely reduce that, especially if shopping at Aldi / Lidl. You have plenty of spare income by the sounds of it, so a shame you’ve ended up owing so much.

This is good advice.

Effectively everything you do now counts double. You have to capitalise as much as possible.

I'd also phone the likes of Sky, mobile providers, etc to cut any packages to the lowest possible.

I know it's hard to not see it through this lens but try not to beat yourself up about it. What's done is done. You are responding well and doing everything you can to minimize the damage. This takes courage. It will be okay. You'll take longer and it will cost more but in the grand scheme of things you're still doing really well and have a nice future ahead. Don't be ashamed , you're not the first to make a mistake. Take a big deep breath and forgive yourselves. Then focus on the solution without yh cloud of blame and shame clouding your judgement and causing further hurt to you. You've got this OP 💪🏼👍🏼👍🏼👍🏼

It sounds like you could use help from an experienced debt support organisation to help you get debt-free with a debt-management plan. CAP (Christians Against Poverty) help anybody - you don't have to be low income - and there is no charge. They are recommended by Martin Lewis the money expert guru. The main number is 0800 328 0006.

You absolutely do not "trash your credit file" with 1 missed payment.
How did you miss a payment if you can afford 500 a month. Basically you thought you'd get away with skipping your bills.

I'd sit your kids down and have a family meeting. Give them a simple version of egars happened and say that you're going to need to save a lot of money for months. Ask them to join in. You.might be amazed at what the come up with. Maybe two of them would be wiling to share a room for a year - lots of kids books involve lodgers, they might see it as exciting. I know when I was ten my mum was very stressed about money. She asked me which bits of Christmas i really cared about, and i asked her if it was about the work or the money - she said the money. I said that I'd still really like a stocking for Christmas but it was fine to just wrap up a few things from around the house, that it was just so excitibg getting a stocking. She did that and it was lovely :) likewise could another family member host a Christmas meal if you pledge to do the one after?

I did say on a previous post that this happened when my dad died….

Can't add much other than what others have said other than to make sure all future payments are automatically paid. Life can get busy and it can be hard to keep track.
While I don't agree with some things he says, Dave Ramsey's peace university is very moving/motivating.
The debt free boards on money saving expert forum is also amazing.
Calculate how much you will save if you pay off before February Vs a year on the 28% interest. Then use that figure to motivate you both to explore potential promotion and overtime within current jobs, or look at extra consulting work or similar. Imagine what it will feel like to be debt free

Just seen you’ve got kids so wanted to add to this that when I’ve done the cheap month thing with the kids they’ve actually been suprisingly into it.

We’ve done stuff like foraging for fruit so we didn’t have to buy more, baking instead of buying snacks. We emptied out the craft cupboard and did lots of craft from the things we had etc etc. ended up being quite fun!

If you have £2k a month left over after paying everything including the £500 a month payment, then make that into a £1500 payment. Then the debt will be gone in 18 months.

£1k left is plenty to feed and clothe you all etc.

Could you ask for your credit file to be updated due to the circumstances?

You’re alright- don’t beat yourself up it happens. I’ve got in worse situations and out of worse situations and am still here (I call it ADHD tax)!

Fortunately you can afford to pay the higher minimum payment. Just overpay as much as you can and as quickly as you can and file it as an expensive lesson.

I’ve tried but legally it has to be an accurate representation and I did miss the payment

I don’t think it’s helpful for posters to put the boot in and feel panicked on the OP’s behalf. 🙄 She’s said they can afford the payments, though they’d rather they were lower. They’ll be all right.

People skip up sometimes. Don’t waste your energy tying yourself in knots of anxiety and shame, OP. No need to sell your house or flog all your furniture or work the night shift at an Amazon warehouse, or self-flagellate for the rest of eternity. You’ll get through it with a bit of budgeting and self-forgiveness.

Given your vulnerabilities when this happened have you lodged a complaint at being treated this way by your credit card company? I appreciate you shouldn’t have missed the payment but you were going through a lot mentally and emotionally at the time. Financial vulnerability and now due to this your distress is even more when you should be grieving your Dad and now you’re also having to do deal with this

Can't see your problem, then. That's easy.

You’re on great salaries- can’t you just massively tighten your belts for a couple of months and throw everything at it?

OP stop being so hard on yourself what’s done is done. Time to move forward.

If you have £2k spare a month, put at least £1k towards the debt, without question. We are currently living off NOTHING once the bills are paid. £100 a month for food. It’s bloody hard but we have no choice. You will be fine with £1k left over.

Credit cards are the works of the Devil.

I have seen so many people get into trouble with them- It seems like ''free money'' - except the APR [?] is monstrous.

If one can afford to pay off the entire debt so it accrues no interest, that's just about doable, but it's such a painless way to spend, this is why people end up owing so much in interest.

A neighbour lost her home because banks were falling over themselves to lend her {and others} money at one time, but they want it back, with massive interest.

If you earn £100k, surely you could have saved up the money in advance?

Sorry to hear about your dad dying. My brain was mince during my mum’s final weeks, and for months after her death. I still find the occasional gap in my paperwork from when I forgot stuff with the stress and sadness.

Check all your paperwork and life admin as well as your finances. Don’t beat yourself up.

This, OP💐
everyone makes mistakes.
You’re trying to fix yours.
good luck xx

Oh OP, that knot in the pit of your stomach is awful! I agree with the kinder posters on here: you're facing up to the situation, you're not the first person to be in this situation and you won't be the last. Show some self-compassion - it won't change the fact that repaying your debts won't be fun, but neither would beating yourself up about it!

Pay off as much as you can as soon as you can (don't wait until February). Can you earn some extra? Even if it's only an extra thousand you can throw at the debt it will help.

I understand why you feel the way you do. We're often our harshest critics.

However, 2k a month leftover after the majority of bills is paid, is hardly leaving you on your uppers. Surely, you'll manage quite comfortably.

There are so many people a lot worse off financially.