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Original poster

I’m shit with money, need some advice about credit card debt please!

96 replies

Mousehoel · 07/08/2023 12:18

I have a 0% interest credit card with £5000 on it (I’d hoped to have a big chunk paid off by now, but COL and me not understanding the credit card very well means I still need to pay this off).

The 0% interest is coming to an end later this month, so most of my monthly payment will be covering interest. It’s going up to 21.66%.

I pay £75 per month off the credit card.

I also have an overdraft of around £2000, which (I’ve just added up now and feel a bit sick as I didn’t realise) costs me around £62 a month in daily overdraft fees.

My financial situation isn’t amazing, but should improve from September, and I’d like to prioritise getting rid of these debts.

As far as I can see I have three options:
1 scrimp and save, keep going with current credit card, pay off what I can when I can and pay loads of interest.
2 Change to a new 0% credit card, and keep the overdraft, pay off what I can when I can.
3 Get a personal loan of £7000, pay off £140 each month and more when I can.

Like I said, I’m shit with money. I’m completely out of my depth with this and would love some advice!
Thanks in advance 🙂

OP posts:
Greentree1 · 07/08/2023 12:24

If you can transfer the balance to another 0% credit card. Then try and pay off the overdraft as quickly as you can that is costing you money every month so deal with that first, then start paying down the credit card balance and don't use it any more!

continentallentil · 07/08/2023 12:25

Get a new O% credit card for the CC debt - keep moving it till it’s paid.

Pay the minimum on your CC until your OD is paid as that’s costing your more.

Do not take out a personal loan - it turns into a spiral. Do not use any paid service to sort out your debts.

As a priority, go and see Step Change who will sort out your budgeting for you. Once your debts are cleared you need to build up a rainy day fund and once you’ve done that you need to start a pension (asap).

I’m glad your financial situation is improving, but don’t let this go on - unless you sort out your finances it will get much worse, because the more you earn the more you will spend.

Being crap with money is not a personality trait and it’s not cute - it will hurt you and anyone tied to you.

Badbudgeter · 07/08/2023 12:28

I'd try and transfer the balance to another 0% card. Then pay off overdraft first as it costs you money everyday. Plan B would be a bank loan as lower interest.

Aposterhasnoname · 07/08/2023 12:28

The 0% card is the best option, better yet if you can get one that has a 0% money transfer option to pay of your overdraft as well. You’ll have to be very disciplined with not running it back up though .

tracylamont13 · 07/08/2023 12:29

Have you looked at the Dave Ramsey method? Not for everyone but it's worked for us.

Original poster
Mousehoel · 07/08/2023 12:30

I’m struggling to find a 0% credit card that shows me repayments before committing to it, I don’t know if I’m doing something wrong.

I’ll keep looking, thank you for this!

OP posts:
1990s · 07/08/2023 12:33

Usually on the T&Cs it will tell you what percentage of the balance will be the minimum repayment.

Be careful - some are a lot more than others, but the average is probably around 2.5% from experience?

Jackydaytona · 07/08/2023 12:36

New 0% cc

Prioritise paying off the overdraft

Then pay more off the cc than the minimum payment

Also, try and put a few £ away in an emergency fund (even £50 a month is 600 per year..)

Original poster
Mousehoel · 07/08/2023 12:37

1990s · 07/08/2023 12:33

Usually on the T&Cs it will tell you what percentage of the balance will be the minimum repayment.

Be careful - some are a lot more than others, but the average is probably around 2.5% from experience?

So that would be an issue because I couldn’t afford £125 a month on top of overdraft fees, and as much as I can scrimp it would take a long time to get out of overdraft.

(I really hate that I’ve got myself into this situation!)

OP posts:
Jackydaytona · 07/08/2023 12:37

Mousehoel · 07/08/2023 12:30

I’m struggling to find a 0% credit card that shows me repayments before committing to it, I don’t know if I’m doing something wrong.

I’ll keep looking, thank you for this!

Try the mse website

catsnhats11 · 07/08/2023 12:44

Post in the MSE debt forum and you will get lots of good advice, but @continentallentil sums it up well.

1990s · 07/08/2023 12:55

Mousehoel · 07/08/2023 12:37

So that would be an issue because I couldn’t afford £125 a month on top of overdraft fees, and as much as I can scrimp it would take a long time to get out of overdraft.

(I really hate that I’ve got myself into this situation!)

Show quote history

I had the same problem. I had to cut back on everything else to make the repayment but actually it kicked me up the arse to start really paying it down.

PPs suggestion of MSE forum is a good one as I think they’ll know which cards have a lower percentage.

Stressybessyboo · 07/08/2023 13:04

I'd probably avoid getting a personal loan as with the situation as it is you may then be tempted to re-use the CC and OD. I think you need to work on your mindset. Look in to Dave Ramsey as a PP mentioned. He has a very good method to financially change your mindset with finances and set you up for a good future. I don't particularly agreed with all his views as a person but if you can separate him from his method it really is very life changing and empowering. Good luck OP.

Serenglas · 07/08/2023 13:07

I’ve got 4k on a 0% card and it’s currently £91 pm minimum payment. So I guess about £115-125.

Whataretheodds · 07/08/2023 13:10

How long does the 0% last for on the card?

If you can pay, for example, £125 per month towards your debt it will take you 40 months (3 years and 4 months) to pay off £5000.

You need to be paying more than the minimum repayment to get on top of things.

User1755387908 · 07/08/2023 13:10

Be aware that you may not get enough credit limit to cover the whole lot, sometimes new credit cards come with a lower credit limit as it's something that increases as you have and use the card.

Original poster
Mousehoel · 07/08/2023 13:19

@continentallentil thank you!

Just had a phone call from Step Change who have suggested a personal budgeting plan. I’m waiting for a phonecall now about this.

OP posts:
Original poster
Mousehoel · 07/08/2023 13:21

I couldn’t afford credit card repayment on top of overdraft fees.
I won’t be using a credit card again unless I have money to pay it off straight away!

OP posts:
BLT24 · 07/08/2023 13:21

I have had 4 interest free credit cards over the years and and the minimum payment on each one was always exactly 1% per month.

The quickest way to get out of this debt is to move it all into the lowest interest rate debt that you can. Get a credit card that offers 0% money transfer to pay off overdraft first. Then get your current credit card balance transferred onto new card/s at 0%. Look at a loan if you can’t get enough credit on cards.

1990s · 07/08/2023 13:23

BLT24 · 07/08/2023 13:21

I have had 4 interest free credit cards over the years and and the minimum payment on each one was always exactly 1% per month.

The quickest way to get out of this debt is to move it all into the lowest interest rate debt that you can. Get a credit card that offers 0% money transfer to pay off overdraft first. Then get your current credit card balance transferred onto new card/s at 0%. Look at a loan if you can’t get enough credit on cards.

I’ve always had 1% in the past but found more recently most of them are 2.5%, doesn’t seem to be personal to me but their standard min repayment.

BLT24 · 07/08/2023 13:27

1990s · 07/08/2023 13:23

I’ve always had 1% in the past but found more recently most of them are 2.5%, doesn’t seem to be personal to me but their standard min repayment.

Show quote history

Husband currently has 0% with MBNA and Virgin they are both 1%

Serenglas · 07/08/2023 13:28

@BLT24 My current is with MBNA & is 2.5%
So there must be variety.

MillWood85 · 07/08/2023 13:28

Barclaycard have got a good 0% offer at the moment.

Original poster
Mousehoel · 07/08/2023 13:29

Does anyone have an opinion on personal budgeting plans?
I don’t think I’ve had enough time to process it.

I’d have to change my bank accounts apparently.

OP posts:
BLT24 · 07/08/2023 13:34

Serenglas · 07/08/2023 13:28

@BLT24 My current is with MBNA & is 2.5%
So there must be variety.

He has had the accounts for years so maybe that’s the reason?

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