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.

Am I wrong- are you saying you were paying €170 but could afford €500? Could you afford €700? I'd borrow money from my mom, anyone I could. No more take aways, cinema, lunches. Nothing. No birthday presents or clothes, Christmas decorations. Just buy what you absolutely have to. Forget branded shampoo, Everything.

Ok. So have you also been building up savings for the rest of it, in an interest paying account for when the 0% came to an end?

If you’re bringing in 100k you should surely be able to afford to pay off whatever you’ve built up to bring it down plus £500 (or if you pay off a chunk, less) a month?

Chuck as much money as you can at the debt before you loose the 0%. Do you have an Experian account? Its quite helpful in that it sort of tells you how to up your credit score. That missed payment won't be detrimental for ever. The longer it is since that happened the less impact it has. Experian will also show you what you are pre-approved for, those are soft searches. Have a no spend November and again, chuck money at the debt. Anything to sell on vinted/vestiare ( not sure if that's the right spelling).

Can you transfer to another credit card with a 0% introductory or at the very least a lower interest rate?

Don't be so bloody heartless, her Dad died for goodness sake and she just forgot to transfer the money. I once forgot to pay my council tax because I'd been in hospital. It happens for crying out loud, none of us were trying to "skip paying bills".

You're fools and you know you are. If you're on 100k you aren't stupid and don't need us to patronise you with solutions or insults, you just need to get your heads down and sell as many assets as you can and throw every spare penny at it.

I'm sure you can manage to not buy new clothes for 6 months, and you can get your shopping down even more if you are careful - see it as a challenge! Budget carefully for Christmas and remember if you can pay it off quickly life will return to normal

I was in a similar position about 2 years ago. Good income but financially in a massive hole. I know how you're feeling. The utter dread to checking balance in your current account and living month to month with no safety net.

I found Dave Ramsey and followed his Baby Steps (take a look at his website). I'm now on Baby Steps 4,5&6 and feel much more in control. Please have a look at his website (completely free). With your income you can do this. Please believe that there is light at the end of the tunnel. It feels amazing to be debt free. I'm never ever going back to how I was.

Having said that if you are not sleeping at night please contact Step Change. They can and will help

Something else you can do is call the card providers and plead poverty and ask for a repayment plan. Speak to stepchange.

I’m always afraid of doing this with 0% deals. We never take one where we don’t have the cash in hand to pay it off, but even then it scares me that we would lose the cushion.

in your position, I would cut back as much as possible and either one or both of you get a second job. Even just 4 shifts a month on the weekend would help put a dent in what you owe.

Some great advice re budgets/penny pinching so I won't add to that.

I know you've said you have been declined for loans but can be worth approaching the credit card provider about consolidating to a loan instead. From both personal and professional experience sometimes depending on circumstances they are able to get you on a plan that means the funds are repaid rather than risk an insolvency event. Even if their loan acceptance tools etc online are saying you won't be accepted, an advisor will be able to give more information. Similarly you could ask if you'd be accepted for a credit card with a lower rate than 26%. With the volume of the debt being high even a few % could be impactful and soften the blow.

I would also see about the credit union as an option too as they are sometimes a little more lenient.

Wishing you luck , Op

This seems so unfair. I would encourage you to lodge a complaint, then take it to the Financial Ombudsman. You'll need a copy of your Dad's death certificate to show you're being truthful. This really is horrible.

I'd definitely overpay as much as you can, on your joint salaries, you really could clear that debt in 6 - 10 months.

No as up until recently we’ve paying childcare and another loan that has now ended

😢

Really excellent advice.

Presume you’ve already cancelled Sky, Apple etc? renegotiated your phone contracts.

Any chance you could look at changing jobs? Usually even if just sideways and not a promotion would result in pay rise.

I know selling stuff might seem like small gains, but it all adds up.

Hi OP, first of all, I'm sorry for your loss. Secondly, stop beating yourself up, it’s debt, not the end of the world.

And it’s not a huge amount on your income. You don’t need to sell your house or beg your family or cancel Christmas, mumsnet is often hysterical about debt, as this thread demonstrates.

IIWY I’d work out how best to repay it over the next few years but don’t throw everything at it, you’ve got jobs and kids and you need to still have a life and gin and some fun.

Be realistic, sit down, look at your outgoings and income, make a repayment plan then stick to it and stop worrying. It’ll be gone in the end.

fwiw we once had £55k of debt, a lower income than you do now and we sorted it in the end. Good luck!

£2k a month after mortgage and bills is about £500 a week!

People must really splash cash around on stuff if they can't get by on almost £500 a week between 5 people.

I'd increase the payments from £500 to £1500, leaving you with £1000/month for food etc.

Why are you budgeting £2000 for food and fuel? That seems high, especially in your circs.

You have £2k a month left after you’ve paid all the bills!

so…

£1.3k towards the debt
£300 into savings and start building those up so you don’t rely on credit cards.
£600 for the rest.

and cut up the credit cards! Delete them from your phone. You need to make sure you stop using them.

You can feed 5 people on way less than £150 a week.

Can you switch to seasonal veg, less meat, things like cheap tofu from lidl?
Do you all have allergies and food aversions?

Try meal planning with low-cost nutritious meals.

And go on Moneysavingexpert.com and see where else you can cut down.

Cut out the shame and be pragmatic. You are where you are and you have a high income so if you cut expenditure you will sort it.

Definitely cut them up.
Use money you actually have, rather than live off the 'never never'.

Also, be really honest about what you’re spending the bills on.

do you have Netflix and Amazon prime and Disney plus (for example)? You only need one. Or none at all really.
subscriptions? Magazines, gym etc etc? Cancel.
do you drive short distances when you could walk? It will make a difference for your fuel.

That's what they've been doing. She can't get another card or do any more shuffling.

Op, stop beating yourself up.

Whats done is done! You can afford the debt so commit to the repayments and get on with your life.

This is not worth all the shame and anxiety!!

(and hopefully you have a lovely home to enjoy following your renovations, with a property that is growing in value).

You could possibly call the loan company that you missed the payment on and plead ‘vulnerable customer’ due to the bereavement - use those words specifically.

When did you actually pay it by- there is usually leeway up to the end of a month/payment period. They may be able to adjust your credit file. They can be amended by the credit provider. It depends on the credit provider how much they’ll care though.