Linco22 From United Kingdom, joined Jun 2005, 1380 posts, RR: 17 Posted (7 years 2 months 5 days 12 hours ago) and read 2043 times:
Ok, I wasn't sure wether or not to post such a personal issue on an internet forum. But sometimes I know its good to get advice from 'strangers'. Ok so here is my situation. Currently 75% or my earnings go straight back out my wage at the start of every month. I'm not a home owner. I have a car which takes up 35% altogether. 2 credit cards, 1 loan and a few other direct debits occupy the rest of my outgoings. Socially i'm quite active and this month is due to be busy with birthdays and such coming up. Now this might sound like i'm just unlukcy or silly that I have so much but its really getting me down at times. I try to pay of as much as I can on my cards. Incidently I took the first card to buy my 350D but I ended up racking up the debt and then transferred the balance to a card with 0% for 12 months. Then i've managed to put over £1000 on my original card as well.
So what i'm asking, or hoping to find out is, has anyone else been in the same situation? Or currently is? My other problem is I want more camera gear but keep having to fight myself not to buy them on my cards.
I hope you can understand the nature of my problem.
Skidmarks From UK - England, joined Dec 2004, 7121 posts, RR: 59 Reply 1, posted (7 years 2 months 5 days 12 hours ago) and read 2040 times:
Many people, including myself continually have similar problems. Despite every good intention you nearly always end up overcooking your cards and theres always bloody something needs buying/repairing/paying.
I currently have a monumental credit card bill which I have to pay off. And my salary is completely taken up with my mortgage. This will last another 4 years until the loan we took out is paid. If it wasn't for my air force pension I would have no money whatsoever. And my wifes money (which isn't great)
So, put your camera plans on hold, try and budget properly, cool the piss-ups and see how it goes.
Linco22 From United Kingdom, joined Jun 2005, 1380 posts, RR: 17 Reply 2, posted (7 years 2 months 5 days 11 hours ago) and read 2031 times:
Cheers for that. Chilly over there this morning? I always think to myself, well if I buy this I can just pay off £20 a month on this card. But I guess thats the nature of the beast! I will be cooling the piss-ups. Hangovers ruin my weekends more and more each time.
And as for buying a home, don't want to go there. Its absolutely crazy at the minute for house prices here.
RichardPrice From , joined Dec 1969, posts, RR: Reply 3, posted (7 years 2 months 5 days 11 hours ago) and read 2021 times:
Been there, in 2001 I owed nearly £10,000 on unsecured credit. At one point in that year my outgoings were 150% my incomings, so you can see I was in the sh*t big time. I was doing what you have done - switch cards and then rack up the old card again.
It was the charges that screw you - miss a payment, you get charged, get a payment bounced by the bank, you get charged directly from your account and your available goes down. It was a lose/lose situation.
So I sat down one day, rang up all my creditors and said 'Look, this isnt working, if we dont do anything then the only way out is bankruptcy, lets make a deal k?' and they did. They wanted their money, but they were willing to take less just to get some.
Only one was a pain - HFC (they actually said I shouldnt pay anyone before them...)
5 years later, my out goings on credit payments are less than £150 a month, my credit report is healthy again and Im good to go.
There are ways out, I just got caught before the current upswing in official help - get in contact with your local Citizens Advice who will put you into contact with a couple of Government backed debt groups that will help you deal with your creditors and get something sorted. This is a reaction to all those debt agencies that didnt actually do anything (Bainst and Earnst comes to mind, no official capacity and they didnt actually promise anything for their monthly fee) and its definitely a positive step.
Singapore_Air From United Kingdom, joined Nov 2000, 13722 posts, RR: 20 Reply 4, posted (7 years 2 months 5 days 11 hours ago) and read 2016 times:
Obviously reduce your social expenses. I delay birthday presents by as much as seven months (although this is due to not being able to choose which present to buy rather than financial circumstance). Try reducing your alcohol intake.
Be a rate tart. Fool.co.uk can help you find one. Nowadays the stupid companies make you pay a handling fee of around 2.5%. Remember that while it's 2.5% that you have to pay, you are getting 0.0% interest free on balance transfers for x months (try for 12 or more). All the time you just have to pay in monthly at least £5.
Thanks guys, really appreciate the response. The car I can't help. Its on hire purchase. I have 16 months left for that. I tried to get rid of the car and go to two wheels which insurance wise and overall was much cheaper. But my contract with Ford wouldn't let me out without paying a large fee.
I am actually pretty good at keeping an eye on my money. I know what comes in and what goes out and what i'll be left with each month.
Skidmarks From UK - England, joined Dec 2004, 7121 posts, RR: 59 Reply 8, posted (7 years 2 months 5 days 11 hours ago) and read 1999 times:
Quoting VHVXB (Reply 7): ohh do you have favourable tax rates in the Isle of Man?
10% basic rate, rising to 18%. Generous allowances and mortgage/loan tax relief. Unfortunately, unless you are rich (which I am most definately not!), the cost of living is much higher than on the mainland. So, swings and roundabouts really.
A little spendthrift maybe. Young people like you want to go places, see things, meet people, buy nice stuff, and this all costs a lot of money. Because public transport in the UK isn't too good, you also need a car to most of these things (not the piss-ups I hope!)
Then the credit card companies/finance companies make it all so temptingly easy with their promises of 0% this and easy payments that. Buy now, pay in 2008. And once you're hooked, they turn the thumbscrews. Bastards. How much is APR at the moment? Here in NL companies are limited to a maximum, IIRC 16%.
My opinion, it is your own fault Linco, but, and its a very big but, how these credit companies act is totally irresponsible, bordering on the criminal in my mind.
But my opinion won't help you. Can you not go to a Citizens Advice Bureau and maybe with their help secure a cheaper personal loan from one of the more reputable banks? Then you can pay off your debts with the one loan, pay that off bit by bit and still have some 'pocket money' for piss-up now and then.
Luckily I have never fallen into this trap, but I know plenty who have, including my sister. Anyway good luck Linco. Keep us posted from time to time.
ohh a flat tax rate kind of sucks. If you live on Norfolk Island down here there is not tax whatsoever though there is not much of a living you can make off the Island apart from tourism. Though you can find loopholes in the tax system here without getting into trouble
Couldn't agree more. I know its my fault. But to be honest, if I didn't get myself into debt i wouldn't have a car, and all my luxuries. I'd probably have wasted it on something else. Which is probably my problem.
My current APR on one card is 22.3% (up from around 15% and don't ask why this has happened. I got a letter to say it was going up blah blah blah) and 16.9% on the other card. Total balance at the minute is around £3200
VHVXB From Australia, joined Apr 2006, 5519 posts, RR: 20 Reply 14, posted (7 years 2 months 5 days 10 hours ago) and read 1966 times:
Quoting Linco22 (Reply 13): Well last month I paid about £14 in total purchase interest. But one card is £23 next month and the other will probably be about £10/15. I'm sure it will rise every month even if I buy nothing.
Are you only meeting the minimum repayments for each month?
Linco22 From United Kingdom, joined Jun 2005, 1380 posts, RR: 17 Reply 15, posted (7 years 2 months 5 days 10 hours ago) and read 1962 times:
Quoting VHVXB (Reply 14): Are you only meeting the minimum repayments for each month?
I used to. Sometimes I had no choice. But I try to pay a bit more than the minimum. With one card its only slightly more and with the other its twice the minimum or more. I'm hoping to increase that. I spent almost 2 years going overdrawn in my bank account but now i'm out of that only last month. So hopefully i'll be able to throw more money towards to the cards
Oly720man From United Kingdom, joined May 2004, 6517 posts, RR: 11 Reply 16, posted (7 years 2 months 5 days 10 hours ago) and read 1958 times:
Quoting Linco22 (Reply 11): My current APR on one card is 22.3% (up from around 15% and don't ask why this has happened
All the card companies have recently racked up their APRs because they have been forced to stop charging the £25 for not paying the minimum each month. It's now "only" £12.
I'm in a similar situation to yours, but that's because my wife stopped work to have kids so the family income effectively halved... and too poor to be rich, but too rich for all the benefits that some other people seem to get. We've been informed that the child tax credits have been overpaid so we're getting nothing next year. B@st@rds.
And so, no holidays for over 3 years.... no "toys", no going out.... etc... etc.. and buying as little as possible on the plastic. Amazing the amount of money that goes on nappies, wipes, creams, baby milk, etc and has been since March '03 when baby #1 appeared.
To save money....
If you have payment protection on your cards then it's probably a good idea to cancel it. Expert opinion says it's next to useless and there are cheaper ways of doing it, allegedly.
A(nother) loan may reduce the repayments, even though you may be forced to have their payment protection. Loans at the moment are around 7%APR whereas the cards APR are more than double that.
But, basically, if you can't afford it, don't buy it. Beware the party season. No point digging deeper holes for yourself just because.
VHVXB From Australia, joined Apr 2006, 5519 posts, RR: 20 Reply 17, posted (7 years 2 months 5 days 10 hours ago) and read 1952 times:
Quoting Linco22 (Reply 15): I used to. Sometimes I had no choice. But I try to pay a bit more than the minimum. With one card its only slightly more and with the other its twice the minimum or more. I'm hoping to increase that. I spent almost 2 years going overdrawn in my bank account but now i'm out of that only last month.
That sounds alrite. At least your making effort to get rid of this debt as quickly as you can and I hope you can get out of it very soon.
Banco From United Kingdom, joined Oct 2001, 14752 posts, RR: 54 Reply 18, posted (7 years 2 months 5 days 10 hours ago) and read 1952 times:
Debt consolidation can be a good idea, if you know what it is you're doing. The truth is that you it's going to cost you more in the long run if you do it, but if you are aware of that, and accept it, it can still be beneficial to get your finances on an even keel. Where it is a real problem are all the debt restructuring companies who advertise on the telly and then charge you an interest rate of 20%+, which doesn't help at all.
If you can talk to your bank and get a reasonable rate loan to pay off what you have, that might work for you. The thing you need to do is to ensure you first pay off the necessities of life, such as your rent and essential direct debits, and then clear the money you owe on the highest rate of interest first, because you're just throwing money away right now. Credit card debt is outrageously expensive because it's such a high interest rate. If you can get them down first, that will save you an awful lot of money each and every month.
As far as the things you want to buy, you simply can't have them. You are making things worse for yourself because you are spending money you don't have - and worse than that, the interest charges mean that you are spending lots of money and absolutely nothing.
Unless you get to the situation where the interest charges alone are more than you have coming in (that's when you need desperately to talk to the creditors) you have just a single choice: Stop spending money on inessentials and get the debt down. It's not fun, it's not pleasant, but you must do it. You aren't spending your own money, you're spending someone else's.
Cut the credit cards up so you aren't tempted, and when you've paid one off, cancel the card. Then concentrate on the other.
There are no magic cures, I'm afraid.
She's as nervous as a very small nun at a penguin shoot.
Banco From United Kingdom, joined Oct 2001, 14752 posts, RR: 54 Reply 21, posted (7 years 2 months 5 days 10 hours ago) and read 1937 times:
Quoting Linco22 (Reply 20): Banco, you sound like my mother! But honestly thanks for your reply too. I kept putting off cutting them up. I'll do it tonight when I get home...
I've been there, mate. It's not something you want to hear, but I promise you, it's the thing you must do if you want to get out of it. That's why I say there are no magic solutions, unless "stop spending money" counts as that.
She's as nervous as a very small nun at a penguin shoot.
RobertNL070 From Netherlands, joined Sep 2003, 4519 posts, RR: 10 Reply 22, posted (7 years 2 months 5 days 9 hours ago) and read 1932 times:
Quoting Banco (Reply 18): The truth is that you it's going to cost you more in the long run if you do it
How come? Surely if you have one larger single loan, say at Oly720man's 7% APR then you would be better off (?)
The last loan I took out was two years ago to help finance my current, then brand-new car. I borrowed €6000, about £4300, at 5.6% APR with a so called flexible credit - a sort of never-never. I paid it off in 13 months !!
Banco From United Kingdom, joined Oct 2001, 14752 posts, RR: 54 Reply 24, posted (7 years 2 months 5 days 9 hours ago) and read 1926 times:
Quoting RobertNL070 (Reply 22): How come? Surely if you have one larger single loan, say at Oly720man's 7% APR then you would be better off (?)
It depends what you mean by "better off". You will have more disposable income, certainly, but generally speaking the term lengths of the loan are longer, in order to make the debt manageable. In absolute terms, you are likely to be paying off a higher total figure.
As I say, this can be a good idea, but you do have to be aware that it can be an expensive solution.
One way of managing unsecured debt is to see if you can get someone daft enough to accept your balance transfer on to a new credit card offering 0% finance on that balance transfer. But you must be strong enough to not use that card - to cut it up as soon as you have it - which will buy you some time to clear other, more expensive debts. If you can then keep moving that debt around to new card suppliers you actually make money, because the debt then declines in real terms. But you do still have to pay it off at some point, and you simply mustn't add to it elsewhere because you have a higher disposable income.
She's as nervous as a very small nun at a penguin shoot.
25 Oly720man: Get out of / reduce debt hints and info. http://www.fool.co.uk/get-out-of-debt/get-out-of-debt.htm The loans tab has 3 companies with loans less than
26 Banco: Yes, I am quite sure I do! But she's right, you know.
27 RobertNL070: Because of fixed monthly payments? And you are not allowed to make extra payments should you get a bonus? Sorry, but I'm not very well up on how this
28 Skidmarks: See him on Saturday night with Cornish down by the Staines reservoir and he COULD be your Mother Seriously, debt is so easy to get into these days an
29 Banco: Correct. And usually the term length. Because people in debt want to "get their life back" to an extent, they often choose something like a five year
30 Linco22: I like you're attitude Andy, not bad for an ole git But you're right, its been 'easy' for me to get into this situation. If I can survive over the ne
31 RobertNL070: You could economise by not renewing your A.net First Class Membership (could I get banned for writing that?) Then at least you could treat yourself t
32 Banco: I have NEVER been to Staines and never will. Andy's all bitter because Cornish turned him down as being most probably infested with distemper, and ev
33 Cornish: Thats St.Aines . I've heard about all those biological expriments the military did years back on those islands in the north and the mutations that re