DEBT: Please help me / Advice Needed!

[HelpWithMyDebtPLEASE]

Hi all

Name changed as I don't want this to be linked to my previous posts.

I will start this by saying the following;

Growing up my family were not very responsible with money, we were not well off, didn't talk about money and I was never taught the value of money or how to be responsible.
I also have OCD that makes me very compulsive, which I am having therapy to address but is something I may always struggle with.

I had to move house from a furnished property to completely unfurnished last minute so had to take out a credit card to cover the cost of fully furnishing a property as I depleted my savings through lockdown due to furlough and low income. I also had some unexpected costs come in which I had to cover.

I am not making excuses for myself as I know I have let this spiral and I need to get on top of my debt now. My current situation is that I now have 4 credit cards, two are out of the 0% interest period and I need advice as to what my next steps are. This is a long post but I wanted to include everything.

Barclaycard
Balance: £571
Not in 0% interest period, 32.4% interest rate

Lloyds
Balance: £1850
0% interest period ending in October, 32.4% interest rate

Halifax
Balance: £2575
0% interest period until April 2025

M&S
Balance: £1790
0% interest period until May 2025

Total credit card debt: £6,786

Each month I pay between £200 - £300 off these cards, but usually end up putting stuff back on by the time it gets to the end of the month (the Barclaycard is the only one I have ever added onto, the other 3 cards were used for balance transfers and have only ever had money paid off. I also pay over the minimum amount each month even if it's only by £10 or so.

My income and outgoings (monthly) are:
Income: £1750
Outgoing:
Rent: 700
Council Tax: 100
Bills (gas, wifi, electricity, phone, water etc) £300 (minimum)
Travel (work): £100
Food: £200 (minimum)

Then I aim to pay off between £200 - £300 off my credit cards as I say, but it leaves me with next to nothing for unexpected / emergency costs which is where I end up putting back on the Barclaycard when it can't be avoided.

With regards to the credit cards that are now out of the interest free range - do I need to open a new credit card with a 0% balance transfer offer, and transfer both of those balances onto that one?
Can I move multiple credit card balances onto one like that?
Am I best off moving all the balances onto one card? Will that increase my monthly payment?

I really want to get on top of this debt - it was just over £10,000 at the beginning of the year so I'm making progress but I need to do better because I am beating myself up about this every month.

I would really appreciate any advice about what I should do / how I should proceed if anyone could help?

Hopeful bump 🥺

Okay first up, well done on getting your debt down this year - it is hard when you have quite high proportion of your income on unavoidable costs. You're doing great addressing it!

Are you single and live alone? You can def cut down on food costs by shopping smarter- I spend no more than £80-£100 a month on all supermarket shopping (food and household cleaning, toiletries etc etc) - I do Tescos, and honestly never have an issue coming in on budget - I look for offers and buy bulk on the stuff that lasts ages, and am careful about not overbuying fresh so I don't have food waste. I buy basic range on some things but not all by any means - I mix it up. Being veggie helps I think - meat is so expensive!

In terms of treating the debt:
I don't know the point at which it becomes harder to get credit (your income isn't huge so 4 credit cards already is quite a lot) but if you are able to transfer your interest-bearing debt onto a new interest-free transfer card, this is 100% your most economical thing to do. If you do get a new interest free, close down your old interest bearing card when you transfer it. This will help keep your overall amount of available credit lower which will help take out temptations to overuse the cards.

I think you can transfer over two balances into one card - but maybe do a live chat or similar with the bank you're planning on applying with to confirm?

The minimum payment should likely not be overall higher if you consolidate, as it's just the two existing minimum payments put together (although each card will have its own level of min payment- you should be able to look these up).

Finally, if you do manage to get everything onto 0% interest, and you're able to be disciplined, you can play the system and anything you are able to repay above the minimum amount, shove into a good easy access savings account for the time being instead to get a bit of interest. They you can repay off the excess still on your card when the interest free period lapses- pay them off in order of when the interest free expiry ends. You need to be able to be really disciplined that the money you're saving is 'already spent' in your head so it does go on the card at the end of the period. It's not a lot of money in interest really, but every little helps and it's 'free'.

@HelpWithMyDebtPLEASE You are doing the right things however the first thing is to budget correctly. If you are still using the barclaycard your budget isn’t right or you are spending on wants not needs.

It makes no sense adding to the Barclaycard with high interest. Personally I would pay off the Barclaycard asap and close the card.

Then pay just the minimum off the 0% cards and focus all the available repayment money on paying off the Lloyds card. If you can get another 0% interest card transfer the Lloyds balance to that.

Then focus on the Halifax card. Basically keep going and as you pay off each card

WRT budgeting you need to include everything food, presents, annual payments etc. MoneySavingExpert is great for checking you are getting VFM and budgeting.

Well done on starting the process of getting a hold of your situation, just writing it down and seeing the debt fully exposed will act towards a trigger to motivate you out of the hole.

I would throw the majority of your debt repayment on the Barclaycard Balance as you are paying hefty interest on this one, then make the minimum required repayments on all the other cards
Once the Barclaycard is cleared you then what to throw the majority of your debt repayment onto the Lloyds card as you will be paying high interest on this card as from October.
Then make the minimum required repayments on all the other cards.
What are the minimum repayments on all the cards that you need to pay so you don't incur any fees?

There is no point in paying over the minimum amount each month to then have to re-spend on the card.
You say that you pay between £200 - £300 each month but usually end up putting back on them, so you are paying too much. pay less and give yourself a buffer each month so you have a little cash for yourself.
Go through your statements and look at where you are spending this money? what shops/items? Is there any memberships/policies you can cancel or unsubscribe to?

When budgeting your monthly income and outgoings I would suggest...

Income: £1750, are you able to negotiate your salary where you work? if so, have you asked for a pay rise to fall in line with what you bring to your role? Alternatively is overtime an option?
Rent: 700
Council Tax: 100 make sure you are paying the correct amount, some people for various reasons are entitled to discounts. Maybe check the terms of your account with the council to discuss.
Bills (gas, wifi, electricity, phone, water etc) £300 (minimum) you need to budget a realistic amount, don't go for the minimum when creating a budget, or you will not know exactly what and how much you are spending. Also, rather than grouping it under one category, list everything individually. Have you tried to reduce the bill on your internet? Does this figure include simcard/phone contract (can you reduce/change your phone contract)what about any subscriptions such as Disney plus, netflix, life insurance, pension etc
Travel (work): £100 are you making the most of your travel costs? If you drive is car-pooling with a colleague an option? if you use public transport is it cheaper to buy a weekly/monthly ticket rather than daily? Do you take lunch to work? Are there any other costs you incur as a result of going to work? ie parking/work lunches/birthday collections that come out of the blue.
Food: £200 (minimum) you need to budget a realistic amount, don't go for the minimum when creating a budget, or you will not know exactly what and how much you are spending. Do you check what you have indoors before shopping to save money on buying the same things.

I would also recommend you set up an account with credit karma so you can see at a glance what your credit score looks like and make sure all the information on there is correct.
I would also call Lloyds and Barclays to see if they can freeze additional interest for a few months to allow you to get on top of yourself. They are usually very helpful.

Is there anything you can sell on fb marketplace/bootsale etc to make a little extra cash so you don't have to rely on using the cards again?

good luck

Check Dave Ramsey's debt repayment plans. He also recommends setting up an emergency fund of say £1000. This means you don't have to use CCs for unexpected expenses, and makes or easier to tackle the debt.

Hi everyone

Thank you for your replies - I have a tendency to get myself really worked up.

I have been successful in applying for a new card with a 0% interest period for 24 months, plus no fee for a balance transfer - I am going to transfer the Lloyds balance onto that and close the Lloyds account so that I don't start paying interest on that balance.

I am going to prioritise paying off the Barclaycard (and see if there is anything I can sell on Vinted etc for some extra cash to help me pay it off!), then once that's paid off I will close it down.

I will continue to pay off the credit cards still in the 0% balance - maybe I need to start making just the minimum payments to avoid having to put anything back on by the end of the month.

I will also look to see where I can save money - with work / travel for example I get the bus, but we are able to WFH 2 days a week, I think I will start using those WFH days to save the bus fare on those 2 days each week which is small but will help. I will also start meal planning and hopefully I can save cost there.

I live alone so this is all my responsibility but I just want to be able to see the light at the end of the tunnel.

Council tax. Are you in a couple or the sole adult in your household? If it's the latter claim Single Adult Discount (it has slightly different names depending on the council.) Most councils take payments over 10 months. See if you can pay over 12. You won't pay less overall but it should smooth the repayments.
Tax. Are you getting all your tax benefits? I got married tax allowance until recently. Someone more tax savvy should be able to tell you more about what you can claim.

Water. Get a meter if you're not already on one. It can also bring down the amount of the sewerage bill too if you pay to different utilities.

Review insurances at least a month before renewal.
Rent out space - spare room, parking space etc.
Plan ahead. Look at major spendy times . Cut back at Christmas. I've stopped buying outside immediate family , no longer send cards and treat Christmas Dinner just like a regular Sunday dinner.

@MrsMoastyToasty I'm on my own, I have the single persons discount already.

I don't think there's anything I can do differently tax wise, I've done online calculators but I don't think anything needs to change there.

I'm not on a water meter but my landlady won't allow me to have one installed. I'm in a one bed rented flat so I can't rent out any space or anything sadly.

I've made family aware christmas presents won't be lavish this year (not that they normally are!) and have been putting aside £20 a month since June to accommodate the christmas presents this year. It's not much but I knew I needed to plan ahead x

If your tenancy is longer than 6 months you have the right to a meter.

https://www.citizensadvice.org.uk/consumer/water/paying-your-water-bill/changing-to-a-water-meter/#:~:text=You%20have%20a%20right%20to,for%20six%20months%20or%20longer.

You will be able to get out of this situation, concerning Christmas is only there paydays away, it is great you have already had a conversation with family but please be completely realistic with your budget because family would rather you put money towards clearing debt than receiving a gift. However I completely understand that Christmas can be a big deal and important time for families and if that brings you joy then of course set a budget and stick to that so you can still be involved. I would suggest maybe doing a sceret santa though so rather than buying for multiple people you only buy for one. Once you have a budget stick to it. Also check your rewards cards such as tesco clubcard/nectar/boots. You may have points that can go towards those gifts so you can then use the cash equivalent to your debt.

@wednesday32 thank you, I will admit I've been stressing about Christmas but luckily my family know the situation I am in and are completely understanding that I'm not exactly flush so it'll just be one of those things. It'll all be worth it when I don't have all this debt.

I've uploaded a load of stuff I no longer wear / use to Vinted and I plan on any money from there going towards paying off my debt as it's like "extra" money.

I'll probably be using this thread to hold myself accountable and keep on track of progress so if you see me bobbing in and out that'll be why even if I'm talking to myself. Really want to get this sorted now!

^Barclaycard
Balance: £571
Not in 0% interest period, 32.4% interest rate

Lloyds
Balance: £1850
0% interest period ending in October, 32.4% interest rate^

Concentrate on the Barclaycard one for now and throw all available money towards it. Even to the extent of seeing if you can have a couple of really frugal months with grocery shopping, use up what you have in, see if you have any Nectar points etc, cancel any subscriptions you can do without. Can you also switch your bank account for the introductory £150/200?

When you've paid that off (or now) see if they have a 0% balance transfer offer for the Lloyds account. Or apply for a new one. Look at MSE for 'how to review your finances and pay off debt' and do everything that's relevant.

https://www.moneysavingexpert.com/family/money-help/

Assuming you get something like an 18 month 0% deal, you'll have just over £6k at 0%, so pay the minimum on all of these plus £1 to remove the minimum payment marker on your credit file, and start up regular savers (so you can't touch them) to earn interest as a little bit extra towards the debt. You might struggle to pay off all before the interest goes up, unless you get a pay rise to be able to afford more than £300 pm, but if you still have debt, when the 0% ends, just apply for another transfer.

Can you earn any extra money, eg babysitting in the run up to Christmas?