Credit Card Debt!!!

[sssg4]

Hi,

I put a posting on here a month or so back with regards to the debt I have managed to rack up on my credit cards over recent years. It has now reached a point that I am accruing in interest what I am paying on a monthly basis, which is clearly very disheartening when you are a temporary worker on a low wage.

I worked in London up until Sept last year but gave it up to pursue a different career. I am qualifying to do this at present but am struggling to keep my head above boat with all my credit card payments.

My question is, after writing to the credit card companies asking for lowered monthly payments and frozen interest, a number of them have been very clear to reinforce the negative affect that this will have on my credit card file.

The predicament I am in is to whether I should proceed with this option, being fully aware of the adverse effect on my credit file (especially when I am hoping to get into a new career and so rent property) or wait until a time when I can perhaps consolidate all of my debts thus avoiding the mark on my credit file.

Obviously I am unsure whether I will be accepted for a loan to consolidate my debts as starting in a new career I will be on a low basic salary. However, in the meantime, I am paying a lot of money out and getting nowhere with my balances.

Any advice would be very welcome.

[Kathyan]

Contact CCCS, Payplan or your local CAB. All give free advice and will give you your best options for sorting things out. Hope this helps.

[sssg4]

Well thanks for your opinion i.am.legend but that's not really the advice I needed. Kick someone when they are down hey! It is not an issue of mishandling finances, more a case of circumstances have arisen which have, unfortunately, meant that I have had to rely on credit cards to pay bills. I also supported myself at university having to use a credit card as my parenbts could not afford to support me. We are not all blessed with the fortune of rich parents or great jobs.

Not so much of a legend I think!

[sssg4]

Thanks Kathyan...I have in fact contacted them, they advised me to write the letters, which i did. It's now whether to actually take the action that is confusing me. Perhaps I shall call them again.

[helpmetoo]

i have reduced payment and had interest suspended in the past and there is absolutely no negative entries on my experian file

perhaps they are implying there may be a general mark against you as a debtor when in reality it will only be on their particular file

[RevFunk]

You could always just pay nothing.

Have trouble getting credit for 6 years or so but apart form that...

[Postdog]

sorry, I am with I am legend on this. The quicker people start to realise they aren't credit cards but DEBT cards, the quicker they will learn to live without them. Trouble is, as with you, it sometimes needs to be learnt the hard way.

And I am not having a go either - you have my sympathies (believe me, I have been there!) but as a result, I now have a credit card for genuine emergencies only, and never owe more than two weeks salary. I go without some things but I have inner peace.....

As for advice, go with what's been given. Face up to it, seek help, and take it from there without looking at the quick fix option/

[RevFunk]

Or ignore it and dont pay anything back

[CAJ1]

Lots of people get into debt, its easily done. Do NOT get a loan to consolidate your debts, it makes it worse. Go to the Citizens Advice Bureau ASAP, they will work out your income and outgoings and write to all your creditors to agree an affordable repayment plan. Some of them can freeze the interest once you have an agreement. Do not get anymore credit cards and try to cut up the ones you currently have. Try not to panic too much as you can rectify this but you need to not spend anymore!

[themas]

I agree with CAJI's answer - you do need to lok at the situation in the round, not just for now but for the future.

You need to consider whether you afford to go on making what are (I assume) minimum payments, & try to assess whether you could eventually cope with whatever amount of debt you will have if the amount you can afford to pay now is less than the interest/charges added on.

A lot of people have to live with a poor credit record & an absence of credit cards etc. You mention one of the problems, which is that if you want to rent you may fail the landlord's credit check. This might happen if you enter into reduced payment arrangements (depends on what info. gets onto your record & on what attitude the landlord has to it), but it could also happen if you go on as you are now and eventually find you can't cope and have to default on payments.

Bear in mind that - if not happy with your credit rating - landlords would almost certainly accept a creditworthy guarantor if you have a relative etc. who was willing to stand as such.

[kira000]

Its a decision only you can take, but bear in mind, if you DONT take action and come to an arrangement with your creditors, and miss payments, and gradually become worse off, your credit rating will suffer anyway- and they can rightly claim you have ignored the problem and been irresponsibe.
If you do take action, yes, it will show on your credit record, but you will be able to demonstrate that you are tackling the problem, which is far more responsible. Plus from personal experience, you will feel ALOT better once you have a plan of action and are making headway.
Dont be frightened off by the creditors playing up the ngative effects, its in their interests to try and get their money back asap, so they will initially try and scare you.

The only other alternative if you dont want to go down an agreement route, and you cant pay enough off on what you earn, is to take on as much extra work as you can fit in your time, and spend as little as possible. Its hard graft and it will make you tired and effect your social life, but its the only other way! I worked Mon-Fr in my regular from 8-19.00 then from 7am- 19.30 Saturday and Sunday every weekend for 2 years in a second job, and did casual catering/waitressing in the evenings during the week..
Its not for everyone, but it took some of the financial pressure off me, and the other bous is if you are working all the time, its really hard to spend!