Help: seriously ugly Credit Card bill!

S

SMcD

Guest
Hi,

Same old story as a million others, I'm afraid!

For a couple of reasons my spending the last 2/3 months has had to be way above the norm, thankfully that spell is over and I'm back to normal - ie living as frugally as possible!

But I ended up with a seriously ugly Credit Card bill so had to take out a loan to partly sort it out.

The (rough) figures:

I'm a year in to a mortgage with the Ulster Bank (E259,000), paying E1,200 a month

I have two BOI loans - the first amounts to E377 a month (with three years left), the second is E366 (with two years to go).

So the above amounts to just under E2000 a month.

I earn at least E3000 a month after tax (it varies, but it's often E3500ish), so I can cope with the above. The rest of my monthly expenses are okay, I don’t have a car, my mobile phone bill is paid by work, I’ve cut out the socialising (for now!) and food/gas/ESB etc aren’t too bad. I’m not saying I’m left with anything at the end of the month, just that I can cover what I owe on the above!

But! I owe E12,000 on my credit card, E8,500 of it due in a fortnight. Not pretty!

For the first damn time ever I was late clearing the last credit card bill (just under E6,000) but, with the help of the loan, managed it a fortnight late. But there is no way I’ll be able to clear that E8,500 on time, at best I’ll manage E2,000 of it.

I’m really clueless when it comes to dealing with this kind of thing, before buying my house I was never in debt, so it’s a whole new miserable experience!

Can anyone give me some advice on how best to deal with this? I think/hope my earnings are enough to ensure that I can have it all sorted in a few months, if I’m sensible (!?), but the looming CC bill has me terrified.

What should I do?

Any advice would be received with hugs and kisses!

Thanks,

S
 
What if you merged you BOI loans and your CC bill and took out a new loan I'm sure the payments wouldn't be very different to what you are paying now. Maybe with the credit union? They are always very good on rates. Or You could make repayment by direct debits and that way you wouldn't be late on repayments.
HTH
 
SMcD said:
But! I owe E12,000 on my credit card, E8,500 of it due in a fortnight. Not pretty!
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Is it possible to do a balance transfer to a card that will give you 0% for an introductory period, thus giving you a bit of breathing space?

There is a thread on the best value balance transfers in the Best Buys forum-Ulster Bank offer the longest interest free period.

Needless to say, you should avoid making any further significant purchases on your credit card in the meantime.

There are many existing threads on the issue of managing debt that maybe of some benefit to you in dealing with your other debts, like this one and this one.

Best of luck.
 
You need to call the CC company and discuss this with them immediately.
 
People with €1000 disposable incomes after loans should not clock up €8500 on their credit cards in one month.
 
lff12 said:
You need to call the CC company and discuss this with them immediately.
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Discuss what exactly? It is likely to work out better if you get a 0% holiday from another provider, during which time you can make lower regular payments without worrying about interest charges.

I doubt an existing provider will match the terms that are available by doing a balance transfer.

If the balance transfer is not available as an option due to credit record etc, then obviously that changes things.....
 
I know this is obvious but you should cut them up now today, 8 grand in a month is crazy.
 
Hi

I was in a similar position and transferred the balance to another card which offered 0% interest for the 1st 6 months. We have since re-mortgaged (more to do with being very unhappy with current mortgage provider) but with the equity released we have cleared our outstanding bill and finished some projects in the house that needed doing. Now on a better rate for mortgage, debt free and projects completed. Worth looking into.
 
hi amck - i take it that you are debt free apart from the mortgage. Re-mortgaging to pay short-term debt is financial madness. You will end up repaying credit card debt over 25/30 years!
 
amck said:
Hi

I was in a similar position and transferred the balance to another card which offered 0% interest for the 1st 6 months. We have since re-mortgaged (more to do with being very unhappy with current mortgage provider) but with the equity released we have cleared our outstanding bill and finished some projects in the house that needed doing. Now on a better rate for mortgage, debt free and projects completed. Worth looking into.
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but the OP is only 1 year into mortgage:

I'm a year in to a mortgage with the Ulster Bank (E259,000), paying E1,200 a month
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.

Also, didn't OP already get a loan to sort out CC

But I ended up with a seriously ugly Credit Card bill so had to take out a loan to partly sort it out.
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.

Sorry to sound judgemental, but you seriously need to evaluate just what are your priorities, given that 50-66% of your monthly income goes to servicing debt, without considering the €12K you owe on the CC.

Even if you get a Balance transfer at 0% for 9 months, which is doubtful given the circumstances, you must pay this also. This would amount to €1300 p/month, leaving you zilch to live on.

Contrast this to your life before the Mortgage.

Definitely call MABS, but you may have to consider some pretty fundemental changes to your circumstances.
 
Would you be in a pposistion to rent out one of your rooms to the spanish/french students for a month. You get 600 euro a month per student.If you brought in two for the month you'd have an extra 1,200 for the month on top of your wages. Just an idea!
 
Do you mind me asking what you spent 8 grand on; did you buy a car with it? It’s none of my business but this is beyond normal spending problems I don’t mean to be offensive but this is out of control you need a scissors this minute and cut them up, you don’t need more loans for the moment you need to get rid of the credit card immediately and talk to mabs. In your original post you said you are back to living frugally yet you already have two loans.
 
I agree with most people here, building up a CC debt that quickly on limited and alreadt debt-raveaged income is absolutely crazy. You need to really change the way you live.
 
Thanks to everyone who's taken the trouble to reply, I appreciate it. It didn't make for comfortable reading but I'm hardly in a comfortable position! I actually appreciate the 'you big eejit' replies, I need to hear them so I never get myself in a situation like this again, I know how drastic it is. The worst part is that I was always healthily paranoid about my credit card before, I used it as little as possible, but it all got so seriously out of hand because I panicked in an emergency and used the card to bail me out. Most of the money was a loan to a family member which I'm unlikely ever to get back, I know I was insanely stupid and should have handled the situation differently, but I wasn't thinking too clearly at the time. I will contact my Credit Card people and see what they say, meantime I have a 50-50 chance of getting some temporary financial help from another family member which would, at least, ease things in the short-term. Thanks again to everyone.
 
Also, going by your previous post here, you could be in for an additional shock by way of increased mortgage repayments.

As you were on a 1-year fixed rate from June 2005, this is due to expire.

Rates on offer to you now will be substantially higher than what you have been paying for the past year, so be prepared.

You really should contact MABS, as this could easily spiral out of all control.
 
First of all I wouldn't go mad panicking at it all. I think a lot of people here are panic mongers when it comes to credit card debt. Anyhow, I've been in the same situation as yourself with lots of personal loans and a credit card debt much higher than yours is at present! What's the interest rate on your credit card? The first thing I'd do is ring your credit card company and ask them to reduce the interest rate..plead the poor mouth etc...I've always had no problem in getting it down. In the meantime, apply for a new credit card with a 0% Apr and transfer as much as the debt to this when you get it and so on every 6 months...I find MBNA the best credit card company to deal with personally.

The actually amount of interest applied to your balance won't be overly huge per month(depending on your interest rate) so don't panic about it. I had a big cc balance for years and gradually transferred it to personal loans over the time. Have no cc balance anymore so it's possible to dig yourself out of it. Just don't go mad and spend more in future!
 
bb12 said:
First of all I wouldn't go mad panicking at it all. I think a lot of people here are panic mongers when it comes to credit card debt. Anyhow, I've been in the same situation as yourself with lots of personal loans and a credit card debt much higher than yours is at present! What's the interest rate on your credit card? The first thing I'd do is ring your credit card company and ask them to reduce the interest rate..plead the poor mouth etc...I've always had no problem in getting it down. In the meantime, apply for a new credit card with a 0% Apr and transfer as much as the debt to this when you get it and so on every 6 months...I find MBNA the best credit card company to deal with personally.

The actually amount of interest applied to your balance won't be overly huge per month(depending on your interest rate) so don't panic about it. I had a big cc balance for years and gradually transferred it to personal loans over the time. Have no cc balance anymore so it's possible to dig yourself out of it. Just don't go mad and spend more in future!
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Thank you SOOOOOOOOOO much for the encouragement, I was desperately in need of it! I'm sure everyone above is spot on with their 'TIME TO PANIC' messages but at a time like this you need constructive advice, not necessarily to be told you're an idiot - I know that already! Will follow your advice and see what I can do with the CC company, thank you SO much again.
 
SMcD

One thing I didnt realise until recently was that I had originally set up to have an automtic repayment by direct debit of 10% of my balance. I rang them and changed it to 2.5%. This gave me a few months breathing space to repay the balance when money was tight. You still have to be frugal. But it helps with the pressure.
 
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