If you were in £10,000 worth of credit card debt and someone left you £1000

[OnePramAndHisSprog]

Would you use it all to pay off a bit of the debt?
There are so many bits and pieces that we need and we are unlikely to ever get a sum like this again... But it seems like such a joyless way to use the money. And only a drop in the ocean of what we owe.
On the other hand, we are never going to get out of debt unless we prioritise that above everything else. WWYD?

[StetsonsAreCool]

I'm very near the end of paying back all my debt. It was about £9k total, 18 months ago was down to about £6k and now it's down to just under £2k. My debt costs me £370 per month. Knowing that I've got just months left of paying it off, this month I gave myself a payment 'holiday' by just paying the minimum amounts, so that it could spend some money on winter boots for the three of us (me and dh had leaky shoes last winter) clothes for dd (no winter clothes that fit) and some thermal curtains for the house (I refuse to sit and watch our curtains blow around when we've got the windows shut again).

I understand your predicament. When the prospect of being debt free is so far away, the chance to spend money on yourself without feeling sick with guilt, I know how it feels to want to do something that feels nice.

If you're doing something constructive with it, then why not? However, do make sure you weigh that up against how you'll feel holding onto your debt for longer.

We have 2.5 years until dh's personal debt is clear. But we needed to spend some money this month - if only to remind us how we'll feel when we can spend like this every month. If we wanted to that is, we wouldn't because we never want to be in that much debt again. At its worst 6 years ago we had £40k on cards and loans.

Have you looked at someone like Think banking? Dh has a debt management agreement with them,through a debt management consultant. Yes, that's costing money but we weren't disciplined enough to do it on our own.

[StetsonsAreCool]

Sorry , bit of an essay there

[KenAdams]

Pay your debts. You had your "joy" as a student. You can't have everything.

Do you actually want to clear your debt though OP? Saying that you didn't think your situation was that bad and you thought it was normal makes it sound like you've convinced yourself that it's ok to stay in debt.

[Arohaitis]

Wow stetsons good for you, it will be fantastic when you have done it!!

[oscarwilde]

DONT lodge to your credit card in a hurry.

Don't have time (it's late) to read all the posts. You can't transfer to a low interest card unless you pay a lump sum to the NEW provider. Find out how much that is, make the transfer, pay the capital and save yourselves 12 months of interest. If you really want to there might be a small amount of the £1k to spend on a Christmas treat if its just used for the capital deposit with the NEW bank and the last of the interest due from the old provider!

[phantomnamechanger]

try to source what winter coats etc you need second hand - this may be a better investment than buying in cheap places like primark - try charity shops, even freecycle.

[foreverondiet]

Pay back the debt. And have a plan to work out how to pay back the rest. You can't afford to spend any of it.

[BigPawsBrown]

Us it to pay off the debt. It's hard I know. Then use the amount your interest has decreased by to continue paying off the debt.

[StetsonsAreCool]

Thanks Aro, it's taken a massive attitude shift, and a slight change in circumstances, but I want the op to know its achievable with a bit of effort. But really you have to want it. Cut up the cards, set a budget and stick to it like your life depends on it. Find the motivation. For us, it's wanting a sibling for dd - can't afford it with the debt we have, so the debt has to go! After that, it's disneyworld - on savings, not credit . I'm still spending the money in my head, but the rewards won't be immediate iyswim?

I had a pushy saleswoman in the supermarket the other day following me trying to talk to me about a credit card. I told her I can't trust myself with one. She told me just to pay off the balance every month and it will be ok. I told her if I have a credit card, I'll spend my limit in a single month. In the end i only got her off my back by comparing myself to an alcoholic. She seemed to get it then, but I felt a bit bad about making the comparison. It's the only analogy that works though. We can't ever have credit again, because I'm scared we'll just make the same mistakes.

[StetsonsAreCool]

Also, OP, while it is worth looking at transferring your balances, you might find that your credit rating is fucked and you've got no access to interest free options. That was certainly the case for us. Sometimes you just have to knuckle down, take a deep breath and dig deep and do it yourself. If you want to that is. If you can find a level of perpetual debt you can live with, then that's up to you too of course.

[Arohaitis]

I think for some it is genuinely an 'attitude' problem, my dm doesn't see a 5k debt on credit card as debt she sees it as having 1k to spend (assuming she has a 6k limit which she doesn't!)

interestingly I am the exact opposite

[StetsonsAreCool]

My dm is similar - that's why I didn't learn how to budget well. I'm just like her in everything though so it's hardly surprising :) But I see her nearing retirement and becoming more financially stable and dread the idea of having debt for another 30 years!

It's so liberating to 'say' some of this though. I can't talk to my friends about it, because let's face it, how can you?

[Charlesroi]

Use the £1000 to pay the next credit card bill and keep the usual card payment to get the essentials. Pay any change from this off the card.
Suggest you lower your credit limit where possible as I think it might make it easier to get a new interest free deal next summer (you don't want to have too much avaiable credit)

The Snowball calculator is quite handy for seeing how much a small overpayment on your credit card can save

[Ecuador]

Stetsons that is really inspiring. We have big debts too and I always liken my spending to an alcoholic. I can't go to shops or have a cc or anything as I will just spend it all in a mad frenzy. It is humiliating and ridiculous but I really cannot help myself.

OP if I was given £1k I would pay it off the card immediately I really would.

I hate living in debt, it consumes probably about 90% of my thoughts and loathe myself for getting into this stupid situation as I know I only have myself to blame.

Will also be looking at the Martin chap's forum for some hints to stop myself spending and dig myself out of this current hole.

Arohaitis, that is me to a tee. £10k limit on a card, I just think I have it to spend. I know I don't really but some part of my brain that I can't control has decided that it is .

[Ecuador]

Yes it is liberating to admit this, I can't tell friends in RL either as my DH earns a good salary which makes it even more humiliating.

Funnily enough I've been looking for a thread like this for days and even went on to the binge eating one as I can see the comparisons so easily. It's all about lack of self-control isn't it?

[StetsonsAreCool]

My dm is similar - that's why I didn't learn how to budget well. I'm just like her in everything though so it's hardly surprising :) But I see her nearing retirement and becoming more financially stable and dread the idea of having debt for another 30 years!

It's so liberating to 'say' some of this though. I can't talk to my friends about it, because let's face it, how can you?

[StetsonsAreCool]

Stupid phone posted that twice, weird...

I don't know about inspiring, more a 'look at that monster'. But thank you anyway.

Yes to humiliating too! I don't think of us as 'poorer' than our friends, but they seem to have it so much more together. They're probably having their own sleepless nights about debt but how would we know??

Self control, absolutely. And a sense of responsibility maybe?

[IAlwaysThought]

I am glad you have seen sense.

I agree with all the posters recommending the Money Saving Expert website. It's great you have £7k of you debt on a debt free card but it's only for the short term so you need to really do you homework.
Credit card debt is a very expensive debt

[IneedAsockamnesty]

Give these people a call

capuk.org/

They really are very very good (get rated as better than CAB by many support service workers and they are easier to get an appointment with) for debt management and budget maximising and education, fine they are a Christian service BUT they are free and even that Martin chap thinks highly of them. One of the services they offer is to totally deal with all your debt issues so you don't even need to think about it.

[Ecuador]

Stetsons honestly your story is inspirational. We have cc debt and a big overdraft plus paying interest only on our mortgage. I know we can't carry on like this but just don't know where to start, it all seems so unmanageable and hopeless.

I also feel I should have responsibility at this stage of my life and to my children too.

All my friends seem so much more sorted, some of them are even mortgage free which makes me feel utterly miserable as this could have been us if we had made better choices. Maybe not mortgage free but certainly other debt free.

I love Mnet for this sort of supportive thread , makes all those crap weirdy threads disappear into the ether!

[MILLYMOLLYMANDYMAX]

If you have a credit card that is £1000 or less pay that off then go for an interest free balance transfer on to that card then you are getting to pay off £1000 and an interest free period on another £1000.

[webwiz]

Ecuador there is a lot of online info that will help you to be more informed about what you can do about debt.

www.adviceguide.org.uk/england/debt_e/debt_help_with_debt_e.htm

www.stepchange.org/


www.nationaldebtline.co.uk/england_wales/

It might be worth getting some financial advice as well to check that you are on the most appropriate mortgage.

[MILLYMOLLYMANDYMAX]

After having ds my brain went into what can only be described as a form of pregnancy alzeimers. I couldn't remember how to make a cup of coffee let alone how to pay a bill. Dh took over paying bills. 2 years later I got my brain back. Dh said I needed to go to work as we could not manage. Within 6 weeks I had reduced our monthly out goings by £1200 per month. I registered with Quidco, went onto all the comparison sites for everything and generally got us onto the best deals that were going. Including the mortgage which all though only saved us a about £40 per month at the time but with the low interest rates has now saved us a fortune. Should add dh is an Accountant.

[Ecuador]

Thank you webwiz! My DH is a very clever person professionally but he is as bad as me when it comes to finances unfortunately!

Will definitely take a good look at those websites later on today.

[CrohnicallyTired]

Pay the money off the credit cards, this will bring your minimum repayment down, but DON'T reduce the amount you are paying each month.

The minimum repayment is almost entirely made of interest. Any overpayment you make reduces the amount you owe. This means that the interest is less- so the next time you make a similar sized payment the amount you owe goes down even more.

I made a £1000 overpayment on a £100,000 mortgage- now that's a drop in the ocean! Our repayments are usually around £410 (35 year loan). By keeping our repayments the same we expect to cut 1 1/2 years off the length of the loan- so 2 months' worth of overpayments now has saved us a year of payments later.

And that is with a 1% capital reduction on a low rate loan. Imagine what a 10% capital reduction on a higher rate loan will do!