To ask you to please help me sort this financial mess!!

[MoneyMare]

DH and I have two credit cards. One is on 0% and has a balance of £3040. The other card has is not on 0% and has a balance of £3228.

We have been paying as much as possible off the one that isn’t 0%, each month, to minimise the interest payment and have just paid the minimum on the other. I have just realised the 0% runs out mid December and am afraid we are going to get hammered in interest. DH is refusing to apply for another 0% card and do a balance transfer, as he is sick of having credit cards. I get it, but it’s going to cost us loads if we don’t. I can’t get as good a deal as my earnings are a lot lower than DH’s (I’m working on that).

We currently have £4,000 in our current account, but have about £1,500 of bills to come out of that. We have other financial commitments as well as this, this is just the direct debits.

What should we do? Please help.

Nice! Thanks.

Thank you for your replies. DH has calmed down and realises it’s silly to let the money we do have get eaten up by interest, but that we need to have a plan to find our way out of this.

Why can't u access savings??

You are you in so much debt? What's going on.

we have £27,000 in savings that we can’t access

Why not?
What is penalty for accessing it?

Your DH seems utterly sick of the debt and the way he is responding makes me wonder if he blames you for the debt OP.

If he resents servicing the debt, then I can understand why he is catastrophising over getting another 0% credit card.
You say you cant get a CC on 0%, so it appears your DH is having to sort out another CC and if he doesnt feel responsible for the debt, or the majority of it, I can understand why he's feeling annoyed.

Would you be able to release some of the £27K on your own? Or does your DH need to co sign to release the funds?

The £27000 is in a lifetime ISA, so if we remove the money, we lose the government bonus. May as well pay the interest in that case, with the amount of money we would lose. We are hoping to buy a house at some stage, so this doesn’t seem like the best idea.

Really??? We have saved £27,000 and have £6,000 in debt with car loans, no expensive phone contracts. We pay £12.00 per month, total, for our two sim only deals. We try to be quite careful, but like many people, the cost of living crisis has affected us, as well as a huge, unexpected car repair. Could we cut back more? The answer is yes. And we should have done so sooner. We aren’t perfect. But your assessment that we are in “so much debt” seems a bit of a stretch.

Why not put down the wine and stop goading posters asking for help? You're on another thread doing it.

Just show him the numbers and tell him to sort it.

Well you are.
Borrowing debt to repay debt.. where does it end?
Why can't you access savings?
Why wont you answer that?

Op you need to have a saving account that you can access as well as the other one for any unexpected big bills. Like your car repairs.

I know this is achievable right now, but it's something you need to look into.

I would pay as much down as you can, as you seem to have excess in your current account and see if you can consolidate onto a new 0% card. Then try and pay off as much each month as you can afford.

I don’t think it’s actually that much relative to how much you have at your disposal. Won’t your other CC take a balance transfer of the expired one? Then just chuck as much as you can spare at it.

This is where we have really gone wrong. This needs to be part of the plan, moving forward.

Why can't you access??? 3rd time asking.

I would transfer to another 0% interest card with the longest interest free period and set the monthly payment so the debt is paid off at the end of the period and cut it up so you can't use it. Any extra money you have you can make additional payments to pay the debt off quicker. I was in the same position a couple of years ago as we had credit cards from when we did house renovations and we did what I have described above, one will be paid next month and the other in about 6 months. It's taken a couple of years and I'll be glad when they are paid off.

It's in a LISA and the loss of the bonus would be more than the saving in interest. She said.

She already said its in a LISA where they would lose the bonus and pay penalty interest which would negate any saving by doing so.

Take the hit. Pay off debt rebuild savings.

You need to prepare a spreadsheet with 3 scenarios to compare:

1. Do a balance transfer to a 0% credit card, calculate the monthly repayment, paying off the debt by the time the 0% runs out.
2. Take out a personal loan, pay off the credit cards, calculate how much monthly repayments would be and how long it would take you to repay the loan
3. let the current 0% card run out, calculate what would the new repayments be and how long would it take you to clesar the card.

You will then have the tree scenarios to present to dh. you can feed all the facts and figures into chat GBT for an easy to understand breakdown (it would ge useful to work out how much interest you would be paying on each scenario, including the fee for a potential 0% balance transfer)

I think the end is in sight. Transfer the credit card you are paying interest on to a new 0% card. Pay off a thousand on the remaining card and then pay that off in big gulps every month. Once that’s done tackle the new card in the same way. It’s painful but the faster you do it the better and personally I find short and painful easier than slow and steady.

Completely agree with this. It can be so emotional as a conversation. Make it data driven and you and partner will clearly see the answer.

agree also about the balance of lots of different types of savings.

also, a learning point is how you track when the 0% is coming to an end. If you really want to get on top of this then you need to get shaper at the management.

Transfer to 0% (sounds like he's on board now from your updates) and then you need a monthly zero pound budget where every £ is accounted so you can be assured you're putting everything you reasonably can towards debt repayment.

Agree also that you need a readily accessible emergency fund to avoid building it back up. General steer is 3-6 months worth of expenses. Best of luck - you'll get there if you make these cards your primary focus.

Yet two of those times were asked after the OP had already answered…

Do not get a loan. Debt consolidation is the worst thing to do. Have you addressed why you got in debt in the first place and are you now living within your means?

You were right to prioritise the card charging interest. Your DH may be sick of credit cards but ignoring it and not applying for 0% balance transfer cards will make the situation worst. You both should be prioritising paying them off if you don't want to use them.

See if you or your DH can get a card for both balances and make a plan to pay them off before the deal ends. Maybe you could both apply for one each? £6000 is not a huge amount so fixable if you do not do anything stupid like continue to run up debt or go down the debt consolidation route.