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Credit Card Bill

8 replies

Aldith · 22/10/2022 18:46

I don’t know if this is the right place to post but I am stressing over it at the moment. I have zero hours contract at work so no regular monthly salary though I do get some hours every week. My credit card bill is just over £700 and I can only afford to make the minimum monthly payments each month.

I have just over £900 in an ISA but every time I suggest using the ISA money to pay off the credit card bill my DH says we’ll sort soon or I’ll give you ex amount to pay towards it when I get paid next month but he never does. That £900 is all the savings I have. I know I’m in a better position than a lot of people in that I can pay it off but doing it means going behind my DH back as he asked me not to use the ISA. What would you do?

OP posts:
LIZS · 22/10/2022 18:50

If Interest on cc is more than on your isa the deficit increases each month so it would make sense to pay it off. However you need to stop spending on it and relook at your joint outgoings,

nannynick · 22/10/2022 19:08

I would look at your overall situation. You need to both be in agreement if you are going to tackle debt.

Have a plan, or take a plan that has worked for many people and use that. Google: Ramsey Baby Steps

Baby Step 1: £1000 starter emergency fund.

You have £900 in an ISA. That could be your emergency fund, if it is instantly accessible. Emergency fund is there to stop you taking out debt when something unexpected happens. £1000 is not very much, it's not meant to be... it is enough to cover a few unexpected events like car tyre damage, washing machine failure, emergency plumber, that sort of thing.

Baby Step 2: List debt smallest to largest, pay minimum on all and pay as much as possible to the smallest until it is gone.
This may not seem mathematically correct. It isn't. It is designed to get you to change your mindset about money. It sets a small goal, you achieve that goal, then you set a bigger goal, achieve that, then set an even bigger goal. If you started with paying off large debt first, it would be like going up a mountain before you have been able to walk in the foothills.

Income - you do not have much coming in, see what you can do to gain more income. A second, third, fourth job. Selling stuff you have at home which you no longer use. Do whatever you can to increase income, so you have money to put towards paying off the debt.

Cash flow management - or budgeting. You need to know where your money is going. You need to be telling your money where to go rather than it just flowing through your fingers. Many bills these days are split in to 12 monthly payments (or 10 such as council tax) to make budgeting easier. Some are variable and thus can be more tricky to budget but you can anticipate something that is coming up in the next month. Use whatever method works for you... pen and paper, a spreadsheet, YNAB app.

So to answer your question, no I would not use the ISA money to payoff the debt. I would use that as an emergency fund, which may mean moving it to an instant access account.

Aldith · 22/10/2022 19:12

Silly AM on March 1st I was waiting on an ambulance for DH. He had Cauda Equina which resulted in him having disks removed and shaved in his back. He hadn’t been with the company long enough so all he got was statutory sick pay. He couldn’t go back to his job as he is no longer allowed to lift more than 20kg or crawl into loft spaces or under shower trays.

It took six months for the doctor to sign him back as fit to work and he now has another job which pays most of our outgoings whilst my salary pays for food and my travel costs.

OP posts:
Aldith · 22/10/2022 19:20

My credit card bill is our only debt as despite a precarious six months we met most of our outgoings. I am job hunting to try and bring in more money.

OP posts:
nannynick · 22/10/2022 19:28

Very good that it is your only debt. Many people have bank overdrafts, several credit cards, car on finance, debt to the electric company.

Look at your household income and expenses. Try to increase income and decrease expenses. It may only be for a short period of time as it sounds like you are coping well, just need to clear that credit card, then build up a larger emergency fund (6 months of expenses is good to aim for so if there is a period of sickness or something that causes drop in income, you have a reserve pot of money to draw from).

autumnboys · 22/10/2022 19:34

You’ve had a very tricky six months, OP. Do be kind to yourself. Try and find a good moment to sit down with your husband and hammer out a plan to pay off the debt and start to rebuild your savings.

BarbaraofSeville · 22/10/2022 20:25

If you're paying interest on the credit card, look for a 0% low or no fee balance transfer so everything you pay towards the card reduces the debt rather than on interest.

If you can't get a cheap deal, pay off the card, then build up your savings again. It's silly to pay interest when you have the means to avoid doing so. Surely your DH can see that?

Have a look at:

www.moneysavingexpert.com/credit-cards/best-0-credit-cards/

KathyLoves · 22/10/2022 20:47

For sure pay it off with the ISA. It's not worth paying interest in that credit card debt. It's a shame if you need to go behind DH's back but with the credit card debt gone you can start paying back into the ISA. If/when he comes through with more £££ then you can put it in the ISA too.

Otherwise, find a CC that allows 0% balance transfers with 0% APR as a temporary solution.

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