Author Topic: Starting as I mean to go on...  (Read 2504 times)

MostlyBearded

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Starting as I mean to go on...
« on: September 20, 2016, 03:18:49 AM »
At some point I may start a journal but for now I just want to share as I'm feeling great this morning

Starting point for month at 1st September!
Debts:

Dad (house deposit) 7,000 @ 0% - This is interest free but treating as urgent because it's my Dad and paying 1,000 a month until clear.
Credit Card 1 - 811 @ 35.9%
Credit Card 2 - 1,698 @ 30.9% - I know, I know... *winces in anticipation of facepunches* I have been carrying these balances for around 2.5 years
Car - 5,012 @ 9%

Debt total - 14,521

Payments this month:

196 Made regular payment to Car 1
1,000 straight from salary to Dad.
2,509 - Sold car 2 which is fully paid up for and threw it all at the credit cards which are now ZERO. Later I will enjoy destroying the cards! :) 

As a bonus, I received a call yesterday to say that I have overpaid my student loan by 831 and they are transferring it back in a few days! This will go straight towards the Car 1 debt.

In total I will have paid back 4,627.90 in short term debts in September! It seemed impossible before I started but in a ridiculously short space of time we are under 10k to go!

« Last Edit: September 20, 2016, 06:02:48 AM by Nameswhack »

pbkmaine

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Re: Starting as I mean to go on...
« Reply #1 on: September 20, 2016, 05:01:23 AM »
Very good start.

afam

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Re: Starting as I mean to go on...
« Reply #2 on: September 20, 2016, 05:41:14 AM »
Hey OP,

I am from germany and first of all I don't get if you mean by 1/9/16 the 1st September or 9th January :-D

My real question is if those interest rates are normal? 35,9% on a credit card or 9% for car loan?
If a bank in germany would charge the most unreliable and worst customer with the most flexible Credit Card more than 15%, they would get stoned to death within 5 minutes. Today you get a car loan for less than 2%, without any extra costs.

MostlyBearded

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Re: Starting as I mean to go on...
« Reply #3 on: September 20, 2016, 06:05:08 AM »
Edited to show 1st September! I forgot that the Brits write dates differently to almost everyone else!

My credit history used to less than impressive and those were the best deals I could get at the time. I think typical Credit card rates are around 10 - 20% and car loans can be anything from 0% to huge (much higher than mine!)

bigalsmith101

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Re: Starting as I mean to go on...
« Reply #4 on: September 20, 2016, 09:39:58 PM »

2,509 - Sold car 2 which is fully paid up for and threw it all at the credit cards which are now ZERO. Later I will enjoy destroying the cards! :) 


Excellent job on your debt assassination! My suggestion to you is to hold on to those cards, and to NOT cancel them. You now have learned the discipline of paying cash for everything. Keep your credit card accounts open and never carry over a balance. You're average account age will stay where it is, and your debt to credit ration will remain lower. If you cancel your cards, your current debt to available credit ratio will jump to a higher percentage, and you'll potentially lower your average account age. You don't want to do either of these things.

However, if you can't keep yourself from spending on the credit card, destroy them immediately, just don't close the accounts :)

MostlyBearded

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Re: Starting as I mean to go on...
« Reply #5 on: September 21, 2016, 02:49:32 AM »

2,509 - Sold car 2 which is fully paid up for and threw it all at the credit cards which are now ZERO. Later I will enjoy destroying the cards! :) 


Excellent job on your debt assassination! My suggestion to you is to hold on to those cards, and to NOT cancel them. You now have learned the discipline of paying cash for everything. Keep your credit card accounts open and never carry over a balance. You're average account age will stay where it is, and your debt to credit ration will remain lower. If you cancel your cards, your current debt to available credit ratio will jump to a higher percentage, and you'll potentially lower your average account age. You don't want to do either of these things.

However, if you can't keep yourself from spending on the credit card, destroy them immediately, just don't close the accounts :)

Thanks Al! I didn't realise that keeping available credit would have a positive impact on my file... I will look into that, I have a feeling having too much access to credit can be seen as a negative factor. Perhaps it's different in the US to the UK? Once my ratings improve I will start taking some reward cards out so that we can reduce the cost of travelling :)

Ensign1999

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Re: Starting as I mean to go on...
« Reply #6 on: September 21, 2016, 08:01:02 AM »
+1 to keeping the cards open.

Do some research on Credit Karma or a similar site on what does and does not impact your credit rating.  I'm more familiar with credit ratings in the US, but I'm sure there are some similarities.  Having more credit available and not using it (open cards with zero balances) helps your rating here.  Age of credit also helps (this is why I have a 20 year old card that I only use about once a year to keep it "active").

If you are still working on controlling your desire to use the cards, then write down the phone numbers for the companies and account numbers, lock that in a safe and then shred the cards.  If you later decide you need them, then call and get a replacement sent.

Great start and all the best to continuing!

MostlyBearded

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Re: Starting as I mean to go on...
« Reply #7 on: September 21, 2016, 09:27:02 AM »
Cool, thanks Ensign. I'm not worried about using them, I have turned the corner and the only way is up from here! :)

Enigma

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Re: Starting as I mean to go on...
« Reply #8 on: September 21, 2016, 10:41:46 AM »
Way to go!  The hardest part I have with friends and extended family is they need to know where they are before they can move in a positive direction.  Keep up the great work!