Credit card debt - advice on best approach

[SnowdropEirlys]

I'm facing £20k of credit card debt across 4 different cards and determined that this is the year that I will clear the balances. Balances are;
£11k
£800
£6k
£5k

I've been in denial and spend far too much, have ignored the total balances for too long, and just paid the minimum amount per month for years.

I'm now in the fortunate position of a temporary contract that pays well which should go on a few months so have the opportunity to pay off almost 4k a month, as long as this contract continues.

I'm willing to change my lifestyle, change my spending habits and will quite enjoy the challenge of finally bringing these balances down - I think the relief of seeing them finally come down will spur me on.

I'd be grateful for advice on how best to tackle this. Should I chip away at each balance, or aim to bring the largest down first?

I'm not sure that I want to take out a consolidation loan which means I will be paying less per month for longer, years even - I'd rather just tighten my belt for a few months and blitz this, once and for all, now I have this opportunity.

I'd be grateful if anyone has any other suggestions or has any experience of tackling large credit card balances and bringing them right down?
Thanks in advance.

Wow you are doing so well 🥳

You are doing so well! Keep going

Great job OP 👏

How inspiring. Well done you.

Late to your thread!!

Well done you, amazing shift in attitude.

If you still have debt in July see if you can get an 0% balance transfer one so you can continue to plough through despite being back to your usual income.

This is inspiring stuff!

Late to the thread but wow! You're attitude is very inspiring. Well done on tackling the debt head on!

Thank you so much everyone.

I started the thread on 19 Feb so two months on, this feels like I’m half way there. Stubbornly determined now. With two months to go, I hope the end of this contract marks the end of this debt. Determined to make that happen.

Great work OP! Have you closed the £800 card with the zero balance now?

You might also like the MoneySavingExpert credit club - you can view your credit report online and check everything is correct, especially if you have a history of building up debts. And then if you do decide to look at a 0% balance transfer card in the future it tells you which ones you are likely to be approved for without leaving a mark on your credit record.

You really should shop around for 0% credit card deal right now. Use the MSE club recommended by a PP.

My DH and I are credit card tarts. We haven't paid interest in over a decade.

It really helps having 0% interest when you start chunking lump sums at the debt.

We don't take credit now unless it's interest free (apart from the mortgage). If we want something that's not interest free we have to save up for it.

Glad you are using the library more now OP. I reckon I save £1000 a year using ours. I always used to suggest the library as a money saving hack and I used to get laughed at and/or criticised on here. Starting to see more and more posters suggesting it so the word is getting out there.

Wow op, you have been doing amazing. Now where can I get a contract to allow me to do the same?? 😂

You are doing brilliantly OP, such an inspiration to read how well you've tackled these debts. Can't wait to hear you announce that the 11k cars is no more

OP how incredible you are! Another tip from me an ex-buyshitidontneedolic

Start selling your old stuff on eBay. The calmness when you get rid of things bought in a debt fuelled glut & some more money brought in to use towards paying the debt was immense for me. Really satisfying & I felt so proud.

You are doing brilliant

Hi OP I had four but took out a loan. The bank would only lend me the money if I closed down 3 and just left theirs open. This was good as it stopped me using them again. The loan was less per month but thanks to bonuses I've got paid it off 18 months early

@ChuckBerrysBoots I haven’t closed the account - I actually keep checking to see whether they will offer interest free balance transfer on it. The limit is £1k on that card.

I’m not tempted to spend on the cards one bit. I have resented this debt for so long. It’s caused me so much worry. The 11k card has a limit of £12k on it. Does it help with credit scores to close accounts or is the main idea to remove the ability to accrue debt again? Do I just call the banks and request to close the accounts? Honestly I want to avoid any interaction with them in case they try to increase my limits etc. Same reason I don’t want to apply for more credit cards with 0% offers. I don’t want any more credit cards. I also enjoy seeing the 0 balances!

I would close the one with the £1k limit and maybe one other and keep the 2 with the highest limits.

The idea isn't to use them but having the credit available makes you look more attractive to mortgage lenders because other companies trust you with high limits.

I think there’s a fine line between looking like you can manage credit and looking like you’re overstretched when it comes to applying for credit in the future. Personally I’ve always closed them once paid off because I already have the credit history to support any future applications. Though to be fair I’ve never been without some kind of credit for very long 😬

I'd close anything with a small limit.

I use 0% cards for big purchases at times, I never pay interest, always paying the minimum payment each month and then making payments to reduce the debt in chunks.

My current debt relates to my car - I was looking for a new car that was a couple of years old but got a great deal on a new one so put the £5k difference on an interest free card (I'd saved the rest).

I think opening and closing too many accounts can affect your credit rating so google it first.

Could you not look at a credit card with 0% Apr? And consolidate that way?

This is amazing! Isn't there anyway you can continue that job after the summer?

I've got four cards with a total of £1700 on them. I've heard that paying them off but keeping them open can help raise your credit rating - is this the case?! I desperately need to improve mine!

It helps your credit score not to have too many lines of credit open. But you should hang onto your oldest card and use it once a year or so (for a small purchase) to keep it active - the age of your oldest credit facility counts positively towards your score. It's also better to have a credit limit available and not use it, than not have any available credit (or worse, to have it and max it out!)

OP if you don't already, I'd recommend you use a free credit score app like credit karma or clear score to keep an eye on it - you should start to see your credit score rising as you make payments and clear your debt. Which is also gratifying!

You are doing brilliantly OP.

It's ridiculous how excited I am for you to get to 0 balance on them all. Keep going OP!

Well done OP! I had a couple of cards with big amounts owing, plus an overdraft, and like you could only make small payments, and this had been going on for years. After inheriting some money I paid them all off and the feeling was wonderful. Never again I will I get sucked down that spiral. Be proud of yourself.