I owe 7000 to a credit card and the interest is half my monthly payment. How can I remedy this when I owe so much.

by , 27 Apr 2011

Answers

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Hi Debar and welcome to Money.co.uk

To be honest, ?7000 is a massive amount of money to owe on a credit card although you are certainly not alone in this level of debt. And as you have sadly found out, ?7000 is not the kind of debt you really want on a credit card!

The obvious suggestion is to transfer it all to a 0% credit card with as long an introductory period that you can get away with. The problem there though may be that you cannot get underwritten for such a card with such a high initial credit limit. But you can try!

The other thought is that this debt is going to go on for eons and interest rates may just rise as well. It sounds like you are restricted to a level of monthly repayment that you can budget for, or are simply comfortable with and used to paying. Obviously, paying more each month will eat away at the debt quicker. But if this debt is part of an overall debt situation, I would make an appointment to see a Citizens Advice Bureau money advisor and ask for overall money management advice. They may be able to contact your card provider, agree a freezing of the interest ( subject to completion of a financial assessment ) and further agreement on a fixed monthly repayment until clear. It's certainly worth a try!

by Snoopy48, 27 Apr 2011

Very good advise by Snoopy48. I would like to add just one more point. If you do transfer the balance to another card for low or 0% rate, make sure to cut up the current card. Doing this will remove any temptations to start spending on the current card again.

by HSP, 28 Apr 2011
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Perhaps look at a lifetime balance transfer card. I think they tend to offer larger credit limits.

If that's not an option it might be worth moving as much of the ?7000 as you can to a 0% balance transfer card so at least you save interest on some of it. You could then try and pay off the card that's charging interest first.

Also you could look at the interest rates on any other credit cards you have to see if it's worth moving your balance to any of them if they are cheaper.

Good luck with it

by LittlePiskey, 28 Apr 2011

Thank you so much for taking the time to answer my question and I will certainly look into all the options suggested

by Debar, 28 Apr 2011

hsp isnt quite right when transfering to an interst free card you must read the small print as most would charge interst on goods you buy on this card and when you pay your monthly premium they will deduct this from what was transfered from the transfer money first so interest would go on to any other purchases and sill carryon without any deductions till the interest free transfer is fully paid off first. so the answer is transfer to an 0% interest card and never use that card until it is fully paid off to really get 0% interest. when you have cleared the initial card by transfering then use the initial card but clear it every month and pay your second card min payment each month to get 0% on each card. hope you can follow that lol

by adzldo, 28 Apr 2011

As far as I am aware, negative payment heirarchy came to an end at the beginning of 2011. So if there is still a credit card out there that is doing this sneakily then you definately have a case against them.

Anyway, thats besides the point. Unless the ?7000 debt on credit card was accumulated under stress situations like separation, divorce or family bereavement, there is no guarantee that after transferring to an interest free credit card, those loans will not rack up again. so the best to do is cut up all those credit cards.

BTW Debar, this is nothing against you. Atleast you have realised that this debt is a problem and are looking at tackling it. This is the firt step, which usually is the most dificult to take. So good luck with your efforts in clearing of this debt and to a happy frugal future.
Regards

by HSP, 29 Apr 2011
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the real answer is stop spending beyond your means

by adzldo, 29 Apr 2011

Is this the only debt you have? If you have more debts contact Churchwood Financial. They have helped me enormously.

by Lana, 30 Apr 2011

I would look to get a 0% card maybe two to make sure you can get it paid off quicker and without the interest adding up even more. But make sure you do not spend on the card whilst you are clearing the balance else you won't benefit from it. Might be worth considering a bank loan as it is a reasonable amount and card companies might not wish to give you that much? Failing that you could ask your current provider if they would give you a lower rate on the card you have which might be better than transferring as you still pay for that.

by NTB, 5 May 2011

I know how you feel , it is a living hell , but if you are in financial difficulty then you should tell the credit card company as they are i believe legally obliged to help you if you are in financial difficulty .
I do not have enough time or space to explain how i remedied this situation personally but i will leave a link that has helped me enormously with my situation .

I hope this helps anyone reading : http://doshmoneysave.co.uk/home-page/

by mmoinv, 23 Nov 2012

Posts within the money.co.uk community represent the views, experiences and opinions of members and experts only. They should not be taken as financial advice and should not be followed without further research.

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