Bournemouth - The Promised Land

Tuesday 22nd July, 2008 - £8,810.98 in debt…

I recently asked around on some forums about services that make it easier to get out of debt, and was bombarded with links to Whatsthecost.com, which apparently is what all the cool people are using. I just went there for the first time, and I feel like I’ve arrived late to a party. A really nerdy party where the guests soberly calculate what order they should pay their credit card bills in, but a party nonetheless.

Just to recap, I have debts on:

1. Barclaycard
2. Capital One card
3. Tesco credit card
4. Barclays overdraft.

I’m paying off the Barclaycard first as it’s got the highest APR, and I’m paying a set amount on each of the others by standing order (£50 on Capital One, £75 on Tesco). I’ve been aiming to pay off £400 a month, but that’s not always possible.

Apparently, I’ve been doing it a bit wrong, but not too wrong. According to the snowball calculator on What’s The Cost, I should be setting up Direct Debits for the minimum on everything but the Barclaycard, and paying off £470 a month in total if I’m going to meet my deadline of the end of April 2010.

The best thing about the snowball calculator doo-dah is that it’s given me some fascinating facts to spur me on. For instance, if I pay everything off in my given time, in the right order, I’ll pay a total of £996 in interest. Horrified gasp. But, if I were just paying everything willy-nilly without (ahem) “snowballing”, I’d lose an additional £650.

The site has even done a good job of justifying my first act as a debt-payer-off: Getting rid of the comparatively cheap NatWest card debt first. “Sometimes, emotionally [rather than financially], it makes sense to pay off the smaller debts first. This can be a great incentive when starting to deal with your debt.”

The calculator is easy to use if you’ve got your debt information in front of you - interest rates, minimum payments, balances and interest-free periods. You’ll also have to tell it how much you can afford to pay back in total per month. By tweaking this, you can find out how much you need to pay to meet your debt-free deadline. 

The results page tells you exactly how much to pay off month by month on each debt. Supposedly, you can then login to save your results and come back to them, but this facility wasn’t working for me. Never mind though - I just saved the webpage instead.

The site is full of similar debt calculators and gadgets, and I can see it being really useful over the next 21-and-a-bit months. Now I’ve just got to encourage my friends to join me for a debt reduction party.

In other news…

Yes, I did sell my soul to the Mail on Sunday for £1.50, but it was worth it. I also got a bit carried away this weekend and fell off the wagon, budget-wise, when I booked two concert tickets. But, at least when I’m starting to chew my own knees off with boredom in November, having spent almost nothing for five months, I’ll be able to cheer myself up by seeing McFly in Bournemouth. Simple pleasures.

 14 points….get in!

Tuesday 27th May, 2008 - £9,341.19 in debt…

HOORAY!!! My first big stroke of luck since starting this pathetic journey towards becoming a normal, debt-free citizen: a flipping-well tax rebate. Thank you, God.

This is my third year of having to fill out a tax return, and I can’t say it’s ever been a pleasurable experience. In fact, my idea of hell is having to fill out endless tax returns in a roomful of pigeons, while Basshunter plays on a continual loop inside my brain.

Fortunately, I’m being given a rebate of £421 without even having to get flapped at by manic birds. I suspect this is to do with having a temping job and paying basic rate tax for a while. Whatever the reason, I’m happy. Once the money comes through, I’ll be transferring every single penny onto the Barclaycard.

However, if that money is to be put to good use and not just swallowed up by life generally, I’m going to have to get another job.

My visits to temping agencies last week were, well, uninspiring. Two of them asked me to look at their websites for available jobs (so what is this office here for, exactly?). Three others asked me to fill out some tax return-style paperwork and perform a series of demeaning tests, but still didn’t produce a part-time job at the end of it. This week, I might have to start asking for full-time work.

Yes, full-time. I’m only baulking at this because I still do freelance work on the side, which will occasionally take up another 35 hours of my week. Taking on a full-time temping job will give me the lovely, comforting security blanket of a weekly paycheque, but at the price of my evenings and weekends. Ah well – it’s not like I do anything with them anyway.

Although… I could have a bloody good weekend with that £421, couldn’t I?

In other news:

My debt has gone down by £20.36 as I’ve just received my Capital One credit card bill. The interest-free period on that card has just run out, so I’ve removed it from my wallet and stashed it upstairs, never to be spent again. Ha.

Still no luck with the online surveys – I keep getting emails saying “guaranteed £2.50 for completing this survey! Whoop whoop!”, but then being told that I don’t meet the criteria. It’s like being told I can enter Eurovision, writing and rehearsing an amazing song, and then finding out that I’m representing the UK.

 I’m eating my phone with rage…..

Wednesday 7th May, 2008 - £9,485.54 in debt…

If you asked any of my friends to describe me, I don’t think they’d use the phrase “quick to anger” very often. Unless any of them were hiding up a tree outside my window earlier today, when I called my credit card issuers about my interest rates.

The story so far: In my first posting, I detailed how much I owe on each of my cards, and their interest rates. After that humiliation, I was further shamed by the comments my post received: “Why don’t you ask them to lower your APRs? It’s easy – I can’t BELIEVE you’re paying that much interest! You must be some kind of mug!” - Or words to that effect.

I tried it today, and now I’d like to know where I’m going wrong.

First, the Barclays overdraft: “Sorry, that interest rate is set in stone. We have a department that helps those who can’t cope with their debt, but you’re not in sufficient difficulty.” Thanks – that’s great news.

Second, the Tesco card: “Sorry, your interest rate can’t be changed, but that’s because you’re not paying any interest until October 21st.” Although this was a welcome surprise (I thought my interest-free period had just run out), I don’t suppose you could call it a victory.

Third, the Capital One card: “No, you can’t change your interest rate. We don’t do that. Bye.” Short but sweet.

Fourth, the Barclaycard: I phoned them in January to block my card, and they had offered me a small cut in my rate, so I was hopeful they might do it again. Their response: “Ah, it looks like your card wasn’t blocked at all – I’ll just do that now. And, hang on a minute, your interest rate wasn’t lowered either!” WHAT?!?!?!

“You can lower it now though, right? CAN’T YOU?” I asked, calmly.

“No – we cannot lower your rate at this point in time.” And the advisor and her manager repeated that phrase over and over until steam shot out of my ears and I destroyed a small village.

So where am I going wrong? Is there some sort of trick I should use? Are the Barclaycard people duty bound to decrease my rate like they said they would? Is there anything I can do about this?

 Olivia Buck says ‘Hi’

Monday 1st May, 2008 – £9,499.45 in debt…

Let me introduce myself: I’ve just turned 28, I’ve been in debt for ten years, and now I’m desperate to pay it off. How did I get myself into this dungheap of a mess of a quagmire?

I’ve always been rubbish with money, and now I’m rubbish with debt. Being in the red was fine at uni - like so many students, I got used to spending money that wasn’t mine. After I graduated, I lived with my parents for two years and paid most of it off, but then I moved to London.

I’ll tell you this for nothing: Living in London is expensive. That’s the first of many shiny nuggets of wisdom you’re going to get from this blog, and I hope you appreciate it. It’s not like I was eating diamond-encrusted swans for breakfast, but an Ikea spree here and there soon adds up.

Over the last year or so, I’ve had the feeling I should be getting out of my debt-hole. My credit rating has gone past ‘high risk’ and into ‘extreme’ territory – only adrenaline junkies and the mafia would lend to me now - but mainly I want to cut up my credit cards because being in debt feels horrible.

So far, I’ve made the following efforts:

• Although I’m self-employed, I’ve got a second job as a part-time secretary. It’s almost unbearable, but it pays the rent.

• My biggest debt was on my Barclaycard at nearly 30% APR, so I’ve transferred half the balance to a Tesco card on an interest-free deal.

• After doing that, I cancelled my Barclaycard and set up a standing order to make regular payments. When I explained why I was doing this, the Barclaycard people were kind enough to drop my Standard APR by a couple of percent.

Even after that, I’ve still got credit card bills of £200 a month and those payments are covering little more than interest. I also have an overdraft limit of £3,000, which I was always straying past before I got the temping job (bad news at the time, but I might be able to claim back some bank charges – more on that later…).

So, here’s the bottom line: How much I owe.

Barclays overdraft: £3,000 (I’m always at the limit by the end of the month)

Barclaycard: £2,977.46 at 27.9% APR

Capital One card: £999.00 at 24% APR

Tesco card: £2,399.00 at 12% APR

NatWest card: £123.99 at 13% APR

That’s a total debt of £9,499.45 (plus interest), which I plan to eliminate completely by my 30th birthday at the end of April 2010. I then plan to fit Jupiter into a blender and become the first woman to unicycle across the Atlantic.

My first job is to pay off that pesky little NatWest card as quickly as possible. I currently pay off that card at £10 a month so, once it’s taken care of, I can add £10 onto my monthly Barclaycard payment.

I’m open to suggestions, so please help me out!

 I’ve got 24 months to get solvent and apart from Ebaying all my belongings and working overtime, I need to know: 

1. Can I make more money?
2. How can I save money so I can increase my card payments without feeling the pinch?
3. What have you done to pay off your debts?
4. What works and what doesn’t?

 Over the coming weeks I’ll be trying out any suggestions I’m given (apart from illegal ones) and regularly reporting back.