paulr

Okay,.a friend at work is in pretty dire straits money wise at the mo and owes £1500 over 2 credit cards.Every month he pays off the min but as you can imagine the debt isn't going down much(and he's still getting clobbered interest wise).One of the cards is with the Halifax who advised him to take out a loan and pay them off.(loan lower interest rate than cc)However cos he had a car repossesed recently the loan app was refused.

He cant afford to pay the cards off in one go,but cant afford to keep paying interest.Trapped!!!!!
My thought was to transfer the debt to a 0% c/card,however with poor credit history will he be accepted.Is the criteria for taking out a c/card lower than a loan?

Advice appreciated.

fitzscoob

the only thing i could do to clear my credit card debts was to stay in for a couple of months, and pocket everything i earnt. Soon as the ccs were paid they got cut up.

getting a loan to pay off another loan may help in the short term but at the end of the day hes still got that amount outstanding, may as well bite the bullet and butcher his social life for a few months.

rogp

I started a very similar thread not too long ago with some very helpful replies. I'll see if I can dig out the URL.

http://www.scoobynet.co.uk/bbs/thread.asp?ThreadID=221170

[Edited by rogp - 8/8/2003 1:31:18 PM]

paulr

Halifax refused him a loan........also surely a loan at 6% is better than c/card at 13%.

Markus

I know how this feels. It's a problem about him not being able to get a loan, as a consolidation loan could well help him out, as the interest could be lower than on the card. The only other thing to do is to play credit card juggling, and get a new car which has 0% on balance transfers, thus he can clear one or both cards, and pay no interest for 6 months, and thus be able to pay more off, then he could do the juggle again and switch to another card with 0% interest for 6 months, and keep doing this until it's paid off. I could have done this but deciced it was too much hassle.

paulr

rogp....it'd be appreciated..

Drunken Bungle Whore

I know someone who is waaaaaaaay worse than that - and the reason is they kept taking loans to pay the credit cards and then running the credit cards back up again.

Willpower will be needed as well as financial advice.

7 Foot

If he can get accepted for a new credit card, Barclaycard are offering 0% on balance transfers (can't be from an existing Barclaycard) for the life of the balance. Only condition is he has to use the credit card every month for a minimum of £1.

I did this and set up a direct debit to the NCDL (doggy charity) for the £1.

7 Foot

If he can get accepted for a new credit card, Barclaycard are offering 0% on balance transfers (can't be from an existing Barclaycard) for the life of the balance. Only condition is he has to use the credit card every month for a minimum of £1.

I did this and set up a direct debit to the NCDL (doggy charity) for the £1.

If he gets refused a hermits life it has to be.

PG

rogp's thread

rogp

Deleted after speedy fingers PG beat me to it.

[Edited by rogp - 8/8/2003 1:33:22 PM]

paulr

Markus...are you saying that although you were refused a loan you could have got a c/card? (at a lower rate).....

Basically he's crap with money and i'm trying to help him out.My plan is basically to lower the amount of interst he's paying.

The rest is up to him.

Suresh

I think "Drunken Bungle *****" is right. No amount of reshuffling is going to help unless the underlying habit is broken i.e. spending more than he/she earns.

Been there done that, but many moons ago. Got out of the trap owing mostly to an increase in earnings whilst not increasing outgoings.

Does your mate know what he/she spends each month and on what? Need to reduce expenditure before considering any juggling of debt.

Wish them luck. It can be done, but with some pain.

Suresh

paulr

Suresh..he knows the situation he's in and what needs to be done.

Step 1 is to reduce the amount of interest.Thats my first priority.Gonna get some forms for a 0% card.I think thats what we'll do.
Take it from there.

btw,thanks for the links and replies.

Little Miss WRX

If that fails, speak to the credit card companies and explain the situation, talk to them about it before it becomes a problem. You never know they may sort something out.

Chrisgr31

I think his first stop should be Citizens Advice. I think that most credit card companies will cut the interest if you come up with a proper repayment plan, and advise that you will repay £x per month.

The credit card companies are under pressure at present regarding their rates of interest etc. You might like to call the card companiies on his behalf, and be firmn with them.

The other option is that he stops paying anything on the cards. Sounds dramatic but he might well find that the card companies are more willing to strike a deal if he is paying nothing!

Theres no point getting an additional loan etc when the credit card companies will do a deal when under pressure. Go and see CAB!

TheCarpetCleaner

£1500 over 2 cards should be manageble

Mice_Elf

Well, it's obviously not, so that was a daft statement...

JoeyDeacon

First advice would be to cut the cards up. They will never be cleared all the time they are still sitting in his wallet as he will be temoted to use them. If he needs to keep them incase of absolute dire emergencies then at least put them in a bowl of water in the freezer. At least that way he will need to go home and thaw them out before he uses them which should stop any impulsive spending.

Be honest with you the interest on £1500 can't be a great amount a month so changing to a card with a lower APR isn't going to make a huge difference (unless he can transfer to one with 0% APR obviously)

If he continues paying the minimum each month then it is going to take years to clear the debt. The only advice I can give is to pay as much as he can afford each month as this will greatly reduce the amount of interest he is paying overall.

PPPMAT

I would have also thought £1500 was manageable, do you not mean £15,000 - I have a friend who is in the latter position and that is a problem. Minimum payment on £1500 would only be a few quid a month.

I realise this post is not constructive in any way

Scooby96

Go and stick up a Halifax branch - fecking *****, they wouldn't be exposing themselves to any additional risk by agreeing the loan. It boils down to greed - they're quite happy to allow the debt to continue on the cc rate (probably nearer 15-18%) than offer a loan at approx 8-11% - profit profit profit IMHO

ThePosh

I have to agree with the Citizens Advice idea. If his credit is poo and he can't restructure (which on £1,500 won't save much) they should be able to advise on reaching settlements with the companies (ie freeze the interest).

Also have a look here

http://www.cccs.co.uk/

They seem straight up - it's a charity not a company.

Good luck!

Poshh

paulr

Couple of points.....£1500 is a fair amount if you earn 15k per annum.
The biggest problem is that he is just rubbish with money,and i can see him just paying off the min amount every month for years to come without realising there are alternatives,and without the debt going down.

After having a think about it he may be better trying elsewhere for a loan,at least they introduce some sort of discipline,regular payments etc.Also loan rates are at least respectable........

btw scooby 96,the Halifax did try to arrange him a loan,previous bad debts meant it was refused.

Markus

Trust me I'm really bad with money, and I know how this chap must feel. Think the loan is a way to go. Try Egg, they did me one and I thought they'd laugh at me. It could be a hard slog to clear it, but they will get there. The key point is to not clear the cards then use them again, you have to cut them up. I've not done this in the past and have learnt, painfully from experience. Only reason I have a CC now is thatr I have no credit history in Canada and sometimes you need to use a credit card, and until I can get some credit history here, I have to use my UK one.

There is light at the end of the tunnel, it might be a long possibly very long tunnel but there is light, no matter how dim it might appear. This is what keeps me going.

paulr

Cheers Markus........

MarkO

Get him to give Alvin Hall a call.

Andrew Timmins

paulr,

There must be more to this story than you've told us. Most credit cards have a 2% minimum payment, this would only be £30 per month on £1,500 of debt.

What other expenses has your friend got which are causing the credit card debt to be such a problem?

What past or present credit problems stopped him from getting a loan? The Halifax are very strict about credit history when it comes mortgages so they probably have the same attitude toward loans as well. Just because one lender turned your friend down doesn't mean they all will.

I'm seeing someone on Monday who is about to have his house repossessed. Your friends situation probably isn't too bad in comparison. The CAB can give him free advice on the best way of getting out of debt.