Clearing debt - Better way?

[Ki3r]

Evening PH .

I've got a bit of debt at the moment, it's nothing huge, but would like to get rid of it ASAP.

It's just under £3,000. £2,000ish on a (currently 0% interest) credit card and £900 on my overdraft.

My overdraft is costing me £1 a day I'm in in. So around £25/£30 a month.

My plan is, increase my credit card limit to £3,000, then instead of using my debit card for the month, use my credit card, I can then get rid of my overdraft.

I then plan to get another 0% interest free credit card on balance transfers and pay off my current credit card. (Virgin currently do one for two years).

Then just pay off £150 a month until it's all gone.

Is there a better way that I may have missed? I looked at getting a loan, but after a quick check, I would be paying a total of over £4,000 as only two companies would give me one .

Thanks .

[Cemesis]

How much can you spare each month after you have paid all your other bills?

[Ki3r]

Cemesis said:

How much can you spare each month after you have paid all your other bills?

Currently have around £650 after rent, bike payment (interest free so not worried about that) and phone bill (only real bills I have).

That £650 has to pay for my fuel for bike (and car, but that's getting sorned come the end of the month) and any food for the month.

So properly around £500 a month if I'm really careful, but I'm not very good at being cReful!

[Xerstead]

In which case be a hermit for 2 months, (or even 3) It's cold and wet out there anyway, and it's not so long that your mates will forget you.
You'll clear a third of the debt and feel much better for having done so

[Ki3r]

Xerstead said:

In which case be a hermit for 2 months, (or even 3) It's cold and wet out there anyway, and it's not so long that your mates will forget you.
You'll clear a third of the debt and feel much better for having done so

Don't think I'll feel any better for having cleared £1000/£1,500 and not having a social life for those two/three months .

Much rather take a bit longer and enjoy myself .

[BoRED S2upid]

Ki3r said:

So properly around £500 a month if I'm really careful, but I'm not very good at being cReful!

Debt free by June this year. What more motivation do you need to live like a monk for the next 6 months and pay every spare pound off your debt?

[curlie467]

Ki3r said:

Don't think I'll feel any better for having cleared £1000/£1,500 and not having a social life for those two/three months .

Much rather take a bit longer and enjoy myself .

I would be doing as suggested, just batter it over a few months and get rid of the overdraft at the very least.

You can have a frugal social life instead, it doesn't all have to cost money.

[Saleen836]

If only 2 companies will give you a £4000 loan, how sure are you of obtaining credit cards?

[Ki3r]

Saleen836 said:

If only 2 companies will give you a £4000 loan, how sure are you of obtaining credit cards?

Ive only looked for five minutes, ive already been given a credit card from tesco, so fairly confident I'll be able to get one.

[jammy_basturd]

If you get the Virgin balance transfer card, get a credit limit of £3k, transfer both your overdraft and credit card to it and job jobbed.

If you can't get the Virgin card, do what others are suggesting and just pay off the overdraft over the next 2-3 months.

[bigandclever]

Ki3r said:

I've got a bit of debt at the moment, it's nothing huge, but would like to get rid of it ASAP.

Ki3r said:

Much rather take a bit longer and enjoy myself .

Make your mind up

[Ki3r]

bigandclever said:

Make your mind up

It would be nice to be debt free, however, if it means either paying it off within a few months and not doing anything, or taking longer and being able to enjoy myself, I'll take that option.

[Oakey]

With that mindset you've already lost

[Ki3r]

What mindset is that?

It does make me laugh PH at times. Some part of the forums are great, lots of helpful advice, others, well not so much!

[MrAdaam]

They are right, though. If you want rid, as you put it, 'ASAP' then this would imply that you're willing to put every spare penny into the debt you have and get it gone very, very quickly. You'll likely save money, be better off for it and then look back in 12 months time and wonder why you didn't do it sooner.

[Grandfondo]

Remember most credit cards charge 3/4% for balance transfers.

[Oakey]

You said you wanted rid of the debt ASAP then go on to say you'd rather take a bit longer to 'enjoy yourself'. One of these things contradicts the other. What'll likely happen is you transfer the balance to something else to reduce the debt to a single payment then sometime down the line decide to 'enjoy yourself' on the now empty credit card or overdraft or whatever and end up with more debt. Better to pay it off as quickly you can and get rid of the lines of credit if possible.

[AJS-]

A couple of things I would add to your plan is when you transfer the balance to another credit card cut the old one up immediately, forget all about it.

I've seen a few people do this with the best of intentions only to end up having some "emergency" or a too good to miss bargain they pay for with the card and they've suddenly got two credit card bills coming in.

Be realistic - living like a hermit is all well and good, but if you end up blowing up and having a £500 PH coke and hooker fest then it's no good. Better to allow an extra month to clear your debts and budget for a night in the pub every couple of weeks or so.

[Ki3r]

For anyone who is interested, I've changed my mind about getting another credit card. I don't trust myself to not use it/pay it off quickly.

Gone for a £3,000 loan from Tesco for two years, paying back £3,400ish. Don't think it was too bad .

Just waiting for the paperwork now.

[northandy]

Ki3r said:

For anyone who is interested, I've changed my mind about getting another credit card. I don't trust myself to not use it/pay it off quickly.

Gone for a £3,000 loan from Tesco for two years, paying back £3,400ish. Don't think it was too bad .

Just waiting for the paperwork now.

Past experience told me though that you need to cancel the credit cards once settled up, as it's easy to be paying a loan off and then ending up with a balance on the card again.