Credit Card is killing me

Novar I dont think they would touch that much debt? Could be wrong

I know people in worse situations than billyyard that do not go bankrupt. A 0% or 2.9% BT MIGHT be an option. A $30K BT onto 2 other cards could work but billy needs to get stuck into paying it down. Any chance of a 2nd source of income?? No wife or kids to please means you can focus and work hard.
 
Im more incline to engage in a credit card recovery counseling service.

1. They are free ( they make a commission from the rate) some anyway.
2. They talk to the credit card on your behalf and they can work out a "plan" to works for you to pay the company back ie Rate will be 9% over 3 -4years etc...
3. Expert/ professional help + planning


End of the day the credit card company wants SOME money back and better still a guaranteed return; so if they know your dealing with a credit card recovery counseling service they are more incline to work with you and the company.

Regards
Michael
 
Michael, how would this affect ones CR?

Good question. to be honest im not to sure...:confused:
I think they do a CR check.

One question, why are you more concern about the CR hit then solving the debt itself? thinking of buying another property?

Regards
Michael
 
TerryW would that sort of deal be then reflected on your CRA?

No. I can confirm it did not hit my friends CRAA. That was a condition of the repayment of debt with the credit card companies and a CRAA check was done after all paid out. There were several banks and no listing anything - but none of the cards were in default either.

I also asked the bank if it would affect future borrowings with them and they said no. I did the negotiations myself think I saved $40k for my mate.
 
Thats really interesting TerryW. Don you do this sort of thing for a living or was it just a one off for a friend?


MikeC definitely thinking of more property but there is no way thats going to happen until I can tame this monster
 
Novar I dont think they would touch that much debt? Could be wrong


I think c/c companies would love people like you, large debt transfer and they expect after 12 months no extra would be paid = $ for them.

Get the card .. cut it up and pay down madly for 12 mths then reaccess position.

Maybe even tell your currant c/c company you are considering that option and see if they are prepared to do a deal.
 
And most importantly, LEARN from the experience.

Credit card debt is so easy to rack up but extremely difficult to pay down.

Mine is currently at$3,000 with rates etc (a lot for me) and paying down madly.
 
My issue with selling a house to pay this card debt off is that the cost of selling is steep, especially if you then decide to buy another IP in the next few years.

If a lot of the credit card debt was indeed spent on the IPs, then I would expect that it meant either being able to actually buy the IP (deposits ?) or being able to renovate them.

If this is so, then it is not a "bad" debt but one that could be at a much better rate.

If you consolidate the debt into one of your loans (if possible) how is that different to borrowing more on the same housing loan to spend on doing up the IPs?

So, really, how much of credit card debt is really money that has improved the IPs? This (for me) is the big question. If it really is just personal debt on "stuff", then I would certainly think you might need to live without a credit card.

But, gee, I'd think really hard about what it costs to sell and possibly buy again when you are in a better financial position. Of course, if houses don't increase in value for years, you might still be better off selling, clearing the debt and madly reducing the debt on your own place.

Have you worked out how much it will cost to sell? If you do manage to consolidate it into a housing loan, you then need to continue paying it off as though it is still a credit card with high interest, or you will never get ahead.

Good luck with whatever you decide.
 
Evand that is exactly what I'd like to do but as I have been stuggling so much the last 6 months to keep on top of things the loan history isnt too flash. Although the loans are all up to date there has been a couple of bounced payments when money hasn't cleared in time and a couple of deferals, only for a few days mind you. Not sure that lenders are going to like it?
 
Billy,

You could negotiate yourself. It is best to have the money ready so you could say "i have $5,000 available (to pay off this $20,000 debt!) and can pay immediately." Some lenders may want to know your other debts and finances etc. Others don't seem to care.
 
I used a couple of online calcs to estimate selling and buying something similar. Not far off 30k when its all done. Dont think I should rush into selling if I can find other options
 
Where do you live? You mention two IPs. Are you renting?

Can you find somewhere cheaper to rent, or rent out a room for a while?

Can you sell something (other than a house)?

Can you pack shelves two nights a week, or do something else for a while to get on top of things?
 
Wylie...your post is on the money.

Is there a car that could be sold or another non property asset?

Could the rents be increased slightly?

Could Billyard move back with parents (sheesh....I hated mentioning that one)

I assume the loan repayments are interest only...not principal and interest.

If the loans are at variable rates could they be fixed at a lower rate? (i.e. CBA 3 years at 6.33% or Sunccorp 3 years at 6.2%).

Could we have more details of the 2 loans...interest rates/lender/variable or fixed/p& i or i only? Details of credit card interest rates would also assist.
 
Hi,

New to this forum but I have a problem and would welcome some feedback and hopefully no lectures.

I have 2 IP's

1. Val 380k borrowings 350k
2. Val 440k borrowing 295k

I also have a credit card debt of 63k..ouch:mad:

I work full time and earn around 86k p.a + super but the CC is killing me and cant get on top of it. I have only been in this job for 3 months.

As I see it my only two options are to (1) refinance IP 2 with some sort of split facility and pay off all credit cards then put my head down and try to reduce the split part of that loan or (2) sell investment property 2, pay off cards and start again. Down side here is that the market has headed south in that area and definitely not a good time to sell, would be lucky to get 440 even though a val a year agao was 460.

Its an aweful situation I know and I am losing sleep. Not sure the best way to go.

Any advice or thoughts on my situation?

Billy

damn.. that is a lot. u need discipline with credit cards.
 
Im more incline to engage in a credit card recovery counseling service.

1. They are free ( they make a commission from the rate) some anyway.
2. They talk to the credit card on your behalf and they can work out a "plan" to works for you to pay the company back ie Rate will be 9% over 3 -4years etc...
3. Expert/ professional help + planning


End of the day the credit card company wants SOME money back and better still a guaranteed return; so if they know your dealing with a credit card recovery counseling service they are more incline to work with you and the company.

Regards
Michael


A lot of really helpful suggestions put forward, but this one sounds to me like the ideal approach for your situation. It turns the tables somehow into you helping them (amazingly). I'm not sure that it's fair on your credit providers, but their interest rates are hardly reasonable either (unless you factor in their possible delinquencies). But for heaven's sake, get a grip on this right now, before it cleans you out.
 
Evand that is exactly what I'd like to do but as I have been stuggling so much the last 6 months to keep on top of things the loan history isnt too flash.

I had a mate who was in a very similar position. 63k is not the end of the world if you fix it now and don't let it happen again.

If you go to the bank and request a LOC or mortgage extension on your IP 2 your going to go from ~20% interest to about 7%.
That's going to free up cash to help pay it off faster.

In the case of my mate they didn't have a problem with the credit history since it was freeing up money to pay the loan and he had the equity required.
Then cut up every credit card and cancel the lot.
 
You've been given a lot of good ideas.

See if you can transfer the balance of the card to a low/no interest rate and/or see if you can negotiate on the balance. Then batten down the hatches. Selling IPs will cost you lots in legals, agents fees & CGTax. Best to avoid if you can. Get a second job, sell stuff, move to your parents place, cut spending. Even the little stuff like ringing the bank & asking for a reduction in your interest rates for the mortgages, seeing if you can put your rents up, taking a cut lunch to work. Every little bit you do will help the situation.

Do whatever it takes and get this under control.
 
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