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Credit Card Advice

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  • 19-08-2009 2:21am
    #1
    peanuthead
    Registered Users Posts: 3,111 ✭✭✭


    Hi

    Okay so I have a credit card. Its got 4grand of debt racked up on it, and, while I can technically afford it at the moment, im going into ful time ed in sep and wont have a job to be able to afford the payments on it.

    It was originally a mastercard, from BOI, I switched to Halifax 6 months ago, now a visa, and the 0% is just about to run out. I have gotten it down from 6grnad to 4 in the last 6 months, but at 4grand, the interest is still going to be killer.

    I was thinking of switching over to MBNA for another 6-10 months 0%.

    Is it an easy process - it was with Halifax, but I believe its getting harder.

    I asked Halifax about getting an extension, the girl at desk says that she has to say no, but i can try my luck with head office, which I will do tomorrow.

    I have a CU account, but theres only 400 or so in it, and ive only ever taken out one loan for 300, so i would be lucky to even get a grand off them to put off the card in a lump sum, although its better than nothing and the interest rate on that grand would be lower with CU .

    Any advice??


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    #2
    bistro
    Closed Accounts Posts: 21 ✭bistro


    If you can bounce the debt to 0%, go for it. Just have a plan B in place in case MBNA dont sanction the 4k limit once the account is set up.

    Your other option would be to approach your bank (or credit union) and see if they will arrange a personal loan for you, which in turn will pay off the credit card debt and re-organise your weekly re-payments in a more managable situation.
    Saying that, you would want to get looking for a part time job as either way you look at it, you will have to be able to afford to pay back x amount per week on the 4k.
    Best of luck with it all.


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    #3
    Nic'name
    Registered Users Posts: 218 ✭✭Nic'name


    Be very wary of MBNA. I got myself in the same situation as yourself and found my interest on 3500 going up as high as 200 per month. I went to the relationship manager in AIB last Thursday for advice and he reckons MBNA are the worst for hidden clauses hence grabbing lots of cash.

    If you are going back to full time education and you have your CAO acceptance or other then change your account to a student account. These accounts usually have the least interest on loans. Contact the credit card company for your closing balance then request a loan from your bank of choice. You more than likely will need a guaranture for this, hopefully you will have a family member to confide in who will do this for you. The overall balance on the loan will be much easier (and cheaper) to pay off than the credit card debt. Plus you will have evidence that you made regular payments on a loan to help your credit rating.

    I was extremly reluctant to tell my family about my debt as I'm 26 and didn't want to resurrect teenage lectures. I sucked it up and told my mother. We went into AIB and met the relationship manager initially to get a loan but in the end my mother lent me the money and I set up a standing order to pay her off. Just saw my balance go to zero today :D

    Best of luck and don't let credit card debt own you.


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    #4
    peanuthead
    Registered Users Posts: 3,111 ✭✭✭peanuthead


    Nic'name wrote: »
    Be very wary of MBNA. I got myself in the same situation as yourself and found my interest on 3500 going up as high as 200 per month. I went to the relationship manager in AIB last Thursday for advice and he reckons MBNA are the worst for hidden clauses hence grabbing lots of cash.

    If you are going back to full time education and you have your CAO acceptance or other then change your account to a student account. These accounts usually have the least interest on loans. Contact the credit card company for your closing balance then request a loan from your bank of choice. You more than likely will need a guaranture for this, hopefully you will have a family member to confide in who will do this for you. The overall balance on the loan will be much easier (and cheaper) to pay off than the credit card debt. Plus you will have evidence that you made regular payments on a loan to help your credit rating.

    I was extremly reluctant to tell my family about my debt as I'm 26 and didn't want to resurrect teenage lectures. I sucked it up and told my mother. We went into AIB and met the relationship manager initially to get a loan but in the end my mother lent me the money and I set up a standing order to pay her off. Just saw my balance go to zero today :D

    Best of luck and don't let credit card debt own you.

    Congrats on the zero balance!!!!

    Well, I have decided not to go with MBNA anyway, as I don't have the time to wait - my 13.4% kicks in at the end of next week!!

    But I do have a bit of good news to report - called Halifax and they offered me two options:

    2.9% for 3 months
    6.9% for 6 months

    I'm so sceptical of CC companies now, I feel like such a fool for getting tangled up with this, so I'm not going for 2.9% as I feel thats there to trick people into thinking they will clear their balance early.

    So I'm taking 6.9% for 6 months.

    Asked Dad to take a CU loan out for me, but he cant as lil bro is going to college abroad and he needs one. Fair enough I shouldn't be bailed out over bro's education.

    So I'm going to try clear 800 off it between now and end of Sep, and get a CU loan out for 1grand and put that off it immediately. That should bring it down to 2,200, a much more managable sum, and ill have 5 months to get that down lower again (with Xmas and Birthday falling in between those 5 months I reckon I'm sorted)

    So thats the plan, and more importantly, LESSON LEARNED!!

    Thanks for the advice too!!


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    #5
    Danniboo
    Registered Users Posts: 1,416 ✭✭✭Danniboo


    Hi,

    Can I ask if you don't mind what kind of outgoings bills do you have going out every month. €250 a month is about €62 a week. If you have a full time job you should well be able to pay more than this(presuming you've no other loans). Firstly don't go near MBNA for this. If you could only manage 2k with AIB in 6 months there's no way you'll manage 4k with MBNA in 6 months. They're interest is much higher as are there late payments. Take out a flexible loan if you can get one, Halifax or AIBs interest rates are quite good at the mo. Try to avoid more balance transfers. If you're going back to full time ed, you may not be in a position to meet payments. If you take a flexi loan with AIB you can spread it over say 2/3 years but you can throw extra off it and there's no early repayment penalties. Best of luck :)


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    #6
    dotsman
    Registered Users Posts: 3,636 ✭✭✭dotsman


    peanuthead wrote: »
    more importantly, LESSON LEARNED!!

    Just to make sure the correct lesson was learned!
    peanuthead wrote: »
    I can technically afford it at the moment
    The only Credit Card debt that anyone can 'technically afford' is whatever they are able to pay off at the end of the month. The whole concept of a credit/charge card is that the bill is paid off in full at the end of every month, with a credit card charging a high rate of interest on every cent outstanding.


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    #7
    peanuthead
    Registered Users Posts: 3,111 ✭✭✭peanuthead


    Danniboo wrote: »
    Hi,

    Can I ask if you don't mind what kind of outgoings bills do you have going out every month. €250 a month is about €62 a week. If you have a full time job you should well be able to pay more than this(presuming you've no other loans). Firstly don't go near MBNA for this. If you could only manage 2k with AIB in 6 months there's no way you'll manage 4k with MBNA in 6 months. They're interest is much higher as are there late payments. Take out a flexible loan if you can get one, Halifax or AIBs interest rates are quite good at the mo. Try to avoid more balance transfers. If you're going back to full time ed, you may not be in a position to meet payments. If you take a flexi loan with AIB you can spread it over say 2/3 years but you can throw extra off it and there's no early repayment penalties. Best of luck :)

    Hi

    My outgoings a month are the following:

    Loan €200
    Credit Card €150 - €130 is minumum payment, I try to pay €200 when I can
    And then petrol costs too.

    I am not working full time as you suggest, as I am in full time education now. I was working beforehand, and thats what I meant when I said that I could 'technically afford' the debt at the time of writing.

    Thanks for the advice though :) I am not going to bother with any more loans, as, although it may not seem like it, loans and borrowing are not my style at all (and I would prefer that people didn't make smart comments about how silly that sounds, the fact of the matter is that you don't understand the circumstances whch led to the loan having to be taken out in the first place - the CC however, that was just being silly though)
    dotsman wrote: »
    Just to make sure the correct lesson was learned!


    The only Credit Card debt that anyone can 'technically afford' is whatever they are able to pay off at the end of the month. The whole concept of a credit/charge card is that the bill is paid off in full at the end of every month, with a credit card charging a high rate of interest on every cent outstanding.

    I'm not quite sure what you mean by the first half of that statement??? Unless you assume me to be an absolute idiot (as is the opinion of alot of people who find themselves talking to people with money issues) I'm thinking the obvious lesson to be learned here is to not live beyond your means and to view your CC as an open invitation to a loan at a very high interest rate, so DON'T DO IT!!! Although, if I'm missing out on the big picture, please, do let me in on the secret!!

    I do understand your second point however. Yeah I understand that, and to be fair to BOI, they clearly explained that and heavily advised me to do that, but what can I say, I didn't listen, I was foolish (Having said that, none of that cash was 'blown' it was all spent on worthwhile things like college fees, car insurance, etc... IT JUST WASN'T PAID BACK!! I'm a fool for that, I know!!)

    I just want to point out to people here that I'm not moaning about having to pay this money back, and as one person mentioned something about late payments, I have NEVER in my entire life been late with a payment for ANYTHING - not even eflow!! haha. I'm not that type of person at all, this debt is my responsibility and I know that. I will (not very) happily eat beans on toast for 6 months is it means paying it off quicker, and as it stands I have been putting almost €65 a week off it in a bid to get it down really low over the next 6months.

    Despite how it may seem here I am actually normally extremely organised with money and I am very confident that this would never happen to me again. I just got the card at a bad time in my life when I had come through a bad patch and just decided I wanted to have fun for a while. And putting the important things on the card freed up alot of cash.

    But, as I said, lesson learned, and thanks for the advice!


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    #8
    Nic'name
    Registered Users Posts: 218 ✭✭Nic'name


    Don't mind them, it's easy to judge when you haven't been in that situation. I hope everythings ok with you now as I know how horrible the credit card debt can be.


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    #9
    Toots
    Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,920 Admin ✭✭✭✭✭Toots


    I don't think Dotsman was being smart there, I think he genuinely meant 'learn from your experience'. It's incredibly easy to get carried away with a credit card, hell I've done it once, and I'd never do it again. OP fair play for addressing the debt. The best you can do at the moment is to get your minimum payments in, plus a bit extra every month to bring the debt down. If at any stage you feel that you'll no longer be able to make the minimum payments, inform the bank immediately. The sooner you contact them the better.

    I know the college fees etc were more worthwhile than, say, a new wardrobe, but when students take out cards, I always advise them not to put massive things like fees on them, unless they're planning to pay it off in full in a month or two (with the likes of a grant or some other funding). BOI and other banks do offer student loans, grant advance overdrafts etc, some of which are interest free for a period, or allow you to defer repayments for a length of time. I know you say loans aren't your style, but in the long run, this would have actually been the cheaper option. Not giving out or anything, just giving advice for if you have fees to pay next year.


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    #10
    peanuthead
    Registered Users Posts: 3,111 ✭✭✭peanuthead


    Toots* wrote: »
    I don't think Dotsman was being smart there, I think he genuinely meant 'learn from your experience'. It's incredibly easy to get carried away with a credit card, hell I've done it once, and I'd never do it again. OP fair play for addressing the debt. The best you can do at the moment is to get your minimum payments in, plus a bit extra every month to bring the debt down. If at any stage you feel that you'll no longer be able to make the minimum payments, inform the bank immediately. The sooner you contact them the better.

    I know the college fees etc were more worthwhile than, say, a new wardrobe, but when students take out cards, I always advise them not to put massive things like fees on them, unless they're planning to pay it off in full in a month or two (with the likes of a grant or some other funding). BOI and other banks do offer student loans, grant advance overdrafts etc, some of which are interest free for a period, or allow you to defer repayments for a length of time. I know you say loans aren't your style, but in the long run, this would have actually been the cheaper option. Not giving out or anything, just giving advice for if you have fees to pay next year.

    Thanks for the advice. Yeah, I know it sounds silly, but at the time, although its very obvious, you don't think of the CC as the equivilant (actually worse!!) to taking out a loan.

    It had been drilled into me from a young age never to take loans, but credit cards were seen more as a convenience.

    Thanks for replies though


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