Debt problems with Martin Lewis

[Helen May]

Martin Lewis will talk about all things to do with debt including 'credit card shuffling' - do you do it?

Has yesterday's surprise interest rate rise made things more difficult for you?

Share your tips for coping with money problems.

H

[V8farty]

hi H.

Please tell Martin Lewis PP is on this site.
I'm sure they're missing each other.

thx. V8

[Helen May]

:lol: at V8!

What makes you think I'm in contact with Martin???

H

[Squeamous]

Hi H,

I think JV hit the nail on the head when he said you had to be at it six days a week to make 47p. Imo people should get out more!

[Delboy]

The only debt that has any justification is a mortgage. Anyone in trouble with credit cards, loans, H.P. etc. only has themselves to blame. If you cannot pay cash for something, don't buy it!
I use a credit card, but it is paid off in full, every month. I would not dream of buying something if the money was not available.

[Poodlepan]

The only debt that has any justification is a mortgage. Anyone in trouble with credit cards, loans, H.P. etc. only has themselves to blame. If you cannot pay cash for something, don't buy it!
I use a credit card, but it is paid off in full, every month. I would not dream of buying something if the money was not available.

Couldn't agree more!! :D

[V8farty]

Easy to say.

I got myself into terrible trouble (Designer clothes and expensive drugs were my weakness) and ended up owing thousands! But now due to the new insolvency laws, I can declare myself bankrupt, (After putting everything into my wife’s name) and start all over again in a couple of year, without any kind of stigma attached to it! (Bit like getting an ASBO)

Piece of piss!

[Helen May]

Hi H,

I think JV hit the nail on the head when he said you had to be at it six days a week to make 47p. Imo people should get out more!

Hi Squeamous

You're right it does take a lot of time but if you are needing to make an income from your savings it can be worth it.

I did it for my mum, a pensioner, who needs every penny and it made a difference for her. I now think it's got to be a much better deal or it's not worth losing the interest for the days it takes to do the transfer.

I'm looking at finding a better deal than ING which is as easy as it is to use just now. Birmingham Midshires currently pays 0.5% more which I think is worth swapping to if the account works well.

H

[Squeamous]

H, do you mean you hunt around for the best savings account? I was sort of talking about 'tarts' (Martin's terminology!), who max out an interest free card, use the money to invest and then move CC companies when the interest-free period runs out. Though that might be worth looking into for your mum if you've got the time.....

[Helen May]

I think he has used the same term for savings or maybe it was Alvin Hall? I've done that for myself as well (the savings bit). My mum doesn't use her credit card much but makes use of the interest free period when buying and then paying it off, as I do as well.

I must admit it would be worth doing the cc tarting for a big purchase.

H

[turnipsock]

At last a thread where I actually heard the program on the radio.

I actually considered phoning in on the 'credit card tart' topic.

"Can I use a 0% credit card to buy £30k worth of premium bonds and then move it from card to card every month?"

[Helen May]

That would be very interesting Turnipsock! You'd need a ginormous credit limit for it though....

H

[barn door]

I'm a bit of an obsessive when it comes to being a credit card tart, and scan the T&C's with a zeal that would scare Martin Lewis.

Take Natwest's 0% for 9 months. What a great deal! Except when you consider that there is a transfer fee involved, and that you cannot pay off this fee - which is charged at 17.9% apr, BTW - until the 0% element of the balance has been paid off.

So the 0% offer really, if you look at it quite objectively, will still cost you in the end.

Also, they have an unusual way of charging interest: you have to pay off not only your current statement balance in full AS WELL AS paid off the previous statement balance in full to avoid any interest being charged. If you get it wrong you can be charged a lot of wonga.

Consider this example: you have a balance of £3k and you pay it off it full before the due-date. So, no interest is charged on that statement. But in that month you also spend £10. Your statement arrives and it shows that your previous balance was £3k, you paid it off resulting in a balance of nil. Your £10 purchase is also showing, so your minimum payment is £5. You pay the minimum payment and get charged interest of around £60! How come? Because you only made a part-payment, the previous £3k balance was included in interest calculations!

Make no mistake, every offer - no matter how good it looks in the glitzy advertising posters - is designed to catch out the unsuspecting applicant.

[turnipsock]

I was surprised that somebody came on with a credit card debt of £8k, how can end up owing that much? The next guy was worse, he said he had just had a done something with his house and got a cheque for £20k, he then asked what he should do with it before revealing he had an £18k cedit card debt. Go figure. Are people really this stupid with money.

I know people that take out a loan to buy a car and have the same amount of money saved in savings account somewhere. ie They are getting 1% from their savings account and paying 6% for their loan...overall they are paying 5% to the bank just to have some savings!

[barn door]

"Can I use a 0% credit card to buy £30k worth of premium bonds and then move it from card to card every month?"

In theory, yes, this is possible. However you have to consider the impact of two main areas:
1) continually moving a balance around - this impacts very badly on your credit score
2) having to apply for credit card after credit card - this...erm, impacts very badly on your credit score.

You also have to consider balance transfer fees (commonly 3% of the balance being transferred) which could make a substantial dent in any money that you save. You should be ok if you apply for a card not more often than once every six months, although you would have to be very careful to limit how much credit you apply for in the meantime (even joining 'WorldBooks' or applying for a Next catalogue, for instance, leaves a credit footprint).

And don't ever make just the minimum repayment: pay it + £1 - it looks better as you are not viewed as someone that can can only ever pay the bare minimum.

[turnipsock]

Maybe take out a few credit cards at 0% for nine months, use them to buy the premium bonds.

Then sell the bonds back after 9 months and pay of the credit cards...

[MIKERAPHONE]

We have a 30k mortgage.
My Barclaycard this month will be £60-70.
Do i need to worry about the new rate/
I don't think so.
Now if i had borrowed £130,000 i might be a little restless at night.
The Country runs on debt and credit and always will. :dontknow:

[turnipsock]

Did anybody notice that 46HR 635535 came up in the January draw?

Actually it is quite easy to build up your credit card limit. I have a few cards from over the years. Some I set up standing orders or D/Ds with, I haven't even started the card but the account is still there. I write a cheque to cover three or four months at a time. I noticed that one card has now got a limit of well into five figures.

This might be better than a pension if I can do this with a load of cards. I have no dependants so goodbye and thanks for all the fish.

[Feverfew]

I haven't even started the card but the account is still there.

I wouldn't do this if I were you. There's a chance your card might be duplicated and if you are not keeping an eye on things, you might find it running up a fraudulent debt without your knowledge.

It doesn't do your credit rating any good either to hold cards you do not use.

I'm an ex-credit card tart, used it for a while for a big purchase on the house, which basically I used as a £6,000 interest free loan which I moved onto three consecutive cards, and gradually paid off. Good system, if you can be bothered.