Credit card debt help

[Confuzzled08]

Hi everyone,

I want to start by apologising if this isn’t sensitive- I appreciate there are people in far worse positions.

Ive accumulated a lot of credit card debt; approx 10k. This isn’t awful, but I do have other loans etc that I am paying off, but the credit card debt payments seem to be more and more each month due to bad money management on my part . I earn a decent (I think salary). Take home pay is approx 1800 after tax but I never seem to have much left, mortgage is only 300, childcare about 150, food shopping about 250 a month. Phone contract 37.99, car insurance 15 . Can anyone recommend the best way to tackle the credit card debts please? Would you start with the lowest? Have you done it before and is it achievable?

I had 15k at the worst point. Transferred it all to one low interest card (0% wasn’t common then), and threw every last spare penny at it. Once I got into it I became quite evangelical about paying it off and spent many a happy evening with my spread sheets and calculator working out how to pay it off even quicker. That was 20 years ago and to this day, (not counting mortgage), the most debt I’ve been is £50.

@Singleandproud I looked at a debt consolidation loan before and unfortunately can't get approved as my credit score has taken a bit of a hit over the last year or so

My wages are set to increase quite a bit in February so the other option I was considering was writing to the 3 companies requesting they freeze interest for a few months and I will start making payments at that point. Not sure how successful it will be.

It has just spiralled and seems to get worse every month feel like I can't progress

@starlight1278 have you spoken to the creditors to see if you can extend the term and reduce the monthly amount for now? Instead of defaulting.

Thanks for the insight… I’ll do a good bit of analysing into categories. I need the sobering

Right, I helped my sister tackle exact this. Look through your bank statement and look where the rest of the money goes. Netflix? Coffees? Impulse purchases?

Sit down and work out how much you need to survive.
Mortgage, childcare, food, life insurance, council tax, utilities (gas, electric, water). You need to cut back on food to possibly £50 per week. Cut back on utilities, shorter shower, wash clothes less frequently, switch heating down and use a blanket in evening on sofa.Get rod of phone contract and use SIM only for about £8 per month. Cut out coffees out. Look in your food cupboards and freezer. Can you use up some of the food you already have instead of buying more? Do meal plans. Only buy exactly what you need. No snacks except fruit.

Write to credit card provider and explain you are finding payments tough but don't want to miss payments. Ask if they could freeze interest for you in return for cutting up your card? Some companies will agree this.

Check if you can pay loan back over a longer period so you have to pay less each week.

Set yourself a daily challenge. How can you cut back today. Write down what you did and how much you saved. Keep this up.

Realising you have this problem and wanting to do something about it are two massive steps. I can’t add more other than to wish you well in paying them off.

I know everyone will say this is not a good idea but this is exactly what I did 2 years ago - I now pay a fixed amount each month with the interest frozen. I have paid 1 off already and the rest will be paid in a couple of years (I have a lot!). If I find I am struggling they reduce the monthly amount. My credit score is shot to pieces but that only matters if you need more credit (which I will never take out again!!). I now live within my means without the credit cards building every month. The problem is that the more credit you have to pay off the less likely you are to be approved for 0% loans etc that everyone always suggests so it just builds and builds. Not for everyone but it has worked for me and me into a much more stable, better place.

@Teeheehee1579 how did you go about getting them to default you? Did you just stop making payments? Did you speak to them at all?

I did speak to them (this was Barclaycard and HSBC) after I had missed a lot of payments and they sent me a letter saying the account would go into default. They were very nice and simply said it would be passed to a debt recovery agency which at the time sounded terrifying but as I said it was the best thing that could have happened to me. The recovery agencies are Link and Hoist who went through (over the phone) what I could afford (which was about £10 per month to start!) and then set up the plan. Periodically they contact me to review my finances but I simply tell them nothing has changed and we carry on. They also now and again offer to write it off for a lower sum (which is always ‘000’s and still Unaffordable to me). It’s not for everyone - my credit rating is shot to pieces but since I no longer want to have credit ever again that is fine. I have to live within my means (I do have a mortgage). I am sure it’s not the best way to do it but it improved my life immeasurably going from daily calls and letters from credit card companies to an agreed reasonable payment and no hassle.