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high interest credit card
6 Answers
a mate I work with has one of these, [can't get credit elsewhere type of card] he's slipped behind with the repayments, now he can't catch up. I've told him his best bet is to cancel the card and the company should then freeze the amount he's in debt [ie not keep adding to it each month - interest or other charges] so he's paying it off and getting somewhere reducing the debt he owes.
He thinks he'd like to keep the card going, in case he needs it, although at present he's not reducing the amount outstanding [we're talking about a £600 debt and his repayments are around £40 per month]
He thinks he'd like to keep the card going, in case he needs it, although at present he's not reducing the amount outstanding [we're talking about a £600 debt and his repayments are around £40 per month]
Answers
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If he wont cut up or stop using his card he is not helping himself.
If he has a high interest card he has obviously had money problems before so he sounds as though he is his own worst enemy.
Also, if he cancels the card I dont think they freeze the debt, they will keep adding interest each month until it is paid off.
In fact because they add interest each month you are paying interest on the interest on the interest on the interest etc.
Which is why anyone with a large debt on their credit card is being rather silly (and why the banks love people like that).
Best thing he can do is cut up his card, but he wont.
If he has a high interest card he has obviously had money problems before so he sounds as though he is his own worst enemy.
Also, if he cancels the card I dont think they freeze the debt, they will keep adding interest each month until it is paid off.
In fact because they add interest each month you are paying interest on the interest on the interest on the interest etc.
Which is why anyone with a large debt on their credit card is being rather silly (and why the banks love people like that).
Best thing he can do is cut up his card, but he wont.
How can he think of needing something he is already out of control of ? He is not thinking straight.
He needs to explan the situation, and in the meanwhile in his shoes I'd get advice, probably from Citizen's Advice as a first port of call. He needs to budget, he needs his lenders to realise they won't be able to get blood from a stone, and so offer an arrangement. Or perhaps he can declare himself bankrupt ? Seems extreme for £600 but may be worth bearing in mind if he can't turn it around.
He needs to explan the situation, and in the meanwhile in his shoes I'd get advice, probably from Citizen's Advice as a first port of call. He needs to budget, he needs his lenders to realise they won't be able to get blood from a stone, and so offer an arrangement. Or perhaps he can declare himself bankrupt ? Seems extreme for £600 but may be worth bearing in mind if he can't turn it around.
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