Credit Card Debt

janS

Do any people out there worry about the amount you owe on your credit card?

I have a limit of about 1300 and it is maxed at the moment. I try make the minimum payments every month (all I can afford at the moment) but the amount never seems to go down - its like a bottomless pit.

I feel a bit claustrophobic or panicky. I know its not the largest amount in the world to owe, but I think every month about the amount of interest I have to pay back on top of minimum payment (comes to about 70 per month). I have also been told that 70 is alot to pay (or expected to pay) for a debt of 1300. Because 70 is alot of money for me at the moment, sometimes I cant even afford to pay that.

My credit card is with one of the major national banks. if I decided to change to another company for credit card (say one with less interest or first 6 months interest fee or something) would this affect my chances of getting a loan/mortgage with this bank in the future? Would they look less favourably on you because of this?

Aswell, does anyone know of any good credit card deals available at the moment? Any tips/advice for someone in my situation?

Thanks.

beller b

Not an ammout to really panic about..If you are making the minimum payments you CC company is happy..But if you keep making the minimum payments the balance will never drop..Thebest way to clear it in your circumstances is to get a credit union loan which will clear it in one go & set up payments you can afford to pay...Good luck with it anyway!!

tman

so you're paying over 50% apr?

yeah... i think you should definitely move pal
aib have some 0% apr deelio for balance transfers and 6.9% for the first 12 months.
http://www.aib.ie/servlet/ContentServer?pagename=AIB_PersonalPortal%2FAIB_Services%2Faib_d_service&c=AIB_Services&cid=1004321420959&channel=YM

not saying they're great, just that they seem to be a wiser choice than whoever you're with at the mo

(don't take advice from me though. i'm balls deep in debt too )

janS

Thanks for the advice.
Funny you should say that Tman because its AIB I am with!Ive had the card for the past, Id say, 5 years. Never really thought about it (was able to pay off large amounts hence seeing a difference in the balance) but recently due to financial constraints, I am unable to pay off a chunk of the debt - and 70 Euro per month is quite alot.

K!LL!@N

Perhaps you should try and get a loan to pay off the credit card debt, interest would surely be lower on a loan and if you kept paying the €70 you'd actually be making a dent in the amount.

Oh and cut up the card.

Killian

masterK

K!LL!@N wrote:

Oh and cut up the card.

That's the best advice you can get. If you can't manage your credit card properly you probably shouldn't have one.

The best option is to switch to another provider where you can get an interest free period of 6 months, it'll give you some time to pay off the balance.

Tazz T

I owe in excess of 10k on 5 cards and don't pay a cent in interest. I'm what's known as a 'rate tart' - once introductory period is up, I simply switch to the next 0% offer.

Switch and take the banks for a ride for a change.

Our man in Havana

Surely you can only do this for so long?

esperanza

janS wrote:

Do any people out there worry about the amount you owe on your credit card?

I have a limit of about 1300 and it is maxed at the moment. I try make the minimum payments every month (all I can afford at the moment) but the amount never seems to go down - its like a bottomless pit.

I feel a bit claustrophobic or panicky. I know its not the largest amount in the world to owe, but I think every month about the amount of interest I have to pay back on top of minimum payment (comes to about 70 per month). I have also been told that 70 is alot to pay (or expected to pay) for a debt of 1300. Because 70 is alot of money for me at the moment, sometimes I cant even afford to pay that.

Aswell, does anyone know of any good credit card deals available at the moment? Any tips/advice for someone in my situation?

Thanks.

Why do you need a credit card? (because your friends have one?, because you support capitalism?). If you earn a decent salary, then you shouldn't need credit, and if you don't earn a decent salary then get some more qualifications to get a better-paid job. Or, get a part-time job, set up a business on the side to get some extra cash. Look at ways to save money. That way you won't need loans or credit cards, and you won't suffer from claustrophobia.

The only people who profit from credit cards are the banks.

When are people going to wake up to that?

Our man in Havana

Thanks for the economics lesson there The Reverand I told you so!

Sleipnir

esperanza wrote:

Why do you need a credit card?

Buying things on the internet for example?

K!LL!@N

esperanza wrote:

Why do you need a credit card? (because your friends have one?, because you support capitalism?). If you earn a decent salary, then you shouldn't need credit, and if you don't earn a decent salary then get some more qualifications to get a better-paid job. Or, get a part-time job, set up a business on the side to get some extra cash. Look at ways to save money. That way you won't need loans or credit cards, and you won't suffer from claustrophobia.

The only people who profit from credit cards are the banks.

When are people going to wake up to that?

Not to get off topic here but perhaps you should climb down off your high horse there before you have a nasty fall.

There is absolutely nothing wrong with having a credit card if you use it responsibly.

I've had a credit for a few years and i've never paid any interest on it.
I've never even had money owing on it when the bill came around.
I use it to buy stuff on the internet, plane tickets etc basically anything where it's not feasible to pay with cash.
I always make sure i have the money in my account before i buy anything and i pay things off as soon as they appear in my online banking.

I get the impression you've either been burned by poor credit card use yourself or you know someone who has been, and that's why you're so against them.

People need helpful advice, nothing you've said was helpful.

Killian

kasintahan

Used properly the only fee you should incur from credid card use is the €40 government tax.

A slightly more worrying hidden cost is the general increase in the price of all items, irresective of payment method, that all retailers add to cover the % the cc companies extract on cc transactions.

esperanza

K!LL!@N wrote:

Not to get off topic here but perhaps you should climb down off your high horse there before you have a nasty fall.

There is absolutely nothing wrong with having a credit card if you use it responsibly.

I've had a credit for a few years and i've never paid any interest on it.
I've never even had money owing on it when the bill came around.
I use it to buy stuff on the internet, plane tickets etc basically anything where it's not feasible to pay with cash.
I always make sure i have the money in my account before i buy anything and i pay things off as soon as they appear in my online banking.

I get the impression you've either been burned by poor credit card use yourself or you know someone who has been, and that's why you're so against them.

People need helpful advice, nothing you've said was helpful.

Killian

I've never had a credit card, only a debit card with which I can make Internet purchases, no problem. I'm only against credit cards because I believe you shouldn't spend money you don't have. Sorry if it came across the wrong way, but the fact is that many irish people don't know how to avoid credit card debt. According to this article:
Credit Card debt, the Post
"With only 30 per cent of people paying off their credit card bills in full each month, most Irish people are being hit with hefty interest and other charges."

Just to prove my point, take a read of the following report by the Central Bank on Credit Card debt:

Credit Card Debt in Ireland - Central Bank


PS: I gave very helpful advice: get rid of the credt card.

esperanza

Sleipnir wrote:

Buying things on the internet for example?

You can buy things on the Internet with debit cards too, or your bank account details. If you have a French or UK bank account, you can sometimes even pay by cheque.

Irish banks could, if they wanted to, make credit cards, debit cards, whereby it is still a Visa or Mastercard allowing you to make Internet purchases, but basically it's in the bank interests to profit from the majority who fail to pay at the end of each month. In the UK, it's the same, however in Finland and Germany you need to have money in your account before you can use your Visa or Mastercard. This is a little like the Laser card principle in Ireland.

By the way, on the Aer Lingus site you can pay by Laser and on amazon too, I think.

Sleipnir

You can yeah. Companies in other companies love for you to post cheques for payment. It's also SO convienent! :rolleyes:

As far as I know, only one company outside Ireland accepts laser (CDWOW) possibly aer Lingus do but Amazon do not. (Plus Amazon is not as cheap as others)

What about buying from other parts of the World over the net? America for example. How many americans even know Ireland exists? Or that we have something called a Laser card? How many would care?

So, if I don't want to use a credit card I can only buy from Aer Lingus or CDwow. Rather limiting really.

esperanza

Fair enough! Still banks shouldn't force Irish customers to have credit cards when they could offer debit cards instead, as is the case in some other European countries.

I suggest that you open a bank account in a country where Visa and Mastercard are used as debit cards. After all, as an EU citizen, you are now entitled to open a bank account in any of the member states. This should make Irish banks more competitive in the long term. You just have to prove that you are resident in one of the member states.

You may be interested in reading this:
Opening a Bank Account in another Member State

I have bank accounts in France and Germany, very handy as each offer different services which allows me to completely avoid debt.

Sleipnir

Never knew you could do that. Definately worth looking into. Thanks!

esperanza

Don't mention it! I'm glad to help. Just make sure to read the conditions carefully and if some banks aren't aware of the new EU directive, make sure to tell them about it. You'll always come up against ignorant bank officials.

eth0_

Tazz T wrote:

I owe in excess of 10k on 5 cards and don't pay a cent in interest. I'm what's known as a 'rate tart' - once introductory period is up, I simply switch to the next 0% offer.

Switch and take the banks for a ride for a change.

Sorry but I don't quite believe you. You have 5 cards? I don't think there are even five cards in Ireland that offer 0% interest.

Please fill us in if I am mistaken.

is_that_so

Not all credit card debt is bad. It can allow a business to function effectively and there is a great degree of flexibility in using credit cards for business, particulary for expenses and so on. The big problem arises is when you get users who use it as a extension to their wallet. Ultimately it has to be paid for.
Foreign bank accounts while welcome may not always be an answer i.e. online purchasing. And don't forget debt is a legitimate business expense.

esperanza

Interesting reading material on the subject:

Credit Cards (wikipedia)

Maestro cards

Visa Electron

K!LL!@N

esperanza wrote:

I've never had a credit card, only a debit card with which I can make Internet purchases, no problem. I'm only against credit cards because I believe you shouldn't spend money you don't have. Sorry if it came across the wrong way, but the fact is that many irish people don't know how to avoid credit card debt. According to this article:
Credit Card debt, the Post
"With only 30 per cent of people paying off their credit card bills in full each month, most Irish people are being hit with hefty interest and other charges."

Just to prove my point, take a read of the following report by the Central Bank on Credit Card debt:

Credit Card Debt in Ireland - Central Bank


PS: I gave very helpful advice: get rid of the credt card.

I'm not disputing the fact that there are a large number of people in credit card debt.
It's plainly obvious that there are.
You were ranting ( for want of a better word ) on about people not needing credit cards. And, that anyone that has one is either not earning enough money or is poorly educated, which to put it bluntly is a load of crap.

I don't deny that some form of debit card is needed.
I don't think Laser counts as to my knowledge it's not a pure debit card.
I worked in a bar for a time and i had complaints from a few regular customers because their Laser cards weren't being debited til the end of each month for transactions they'd made in the pub and they were running into problems.
A proper debit card should take the money instantly.
I don't know if this has changed or not.
Plus Laser cards aren't even close to being as widely accepted as credit cards.

Banks are certainly to blame for a lot of the trouble people find themselves in.
If someone maxes out their card and doesn't repayments ( no i'm not talking about paying off the interest ) within a certain timeframe, the card should be frozen until the money is paid back. The credit limit should also be reduced so a similar situation doesn't re-occur.
The banks are always upping people's credit, without even asking.

I still disagree with you though.
Credit cards are fine if used properly, like anything else.

Killian

esperanza

K!LL!@N wrote:

I still disagree with you though.
Credit cards are fine if used properly, like anything else.

Killian

Perhaps they are fine, but unfortunately the truth of the matter is that the majority of Irish customers can't handle credit card debt. And if they can't then, they should find other ways around the problem, like getting a better-paid job, as I suggested, to fund their spending.

janS

Thanks for the replies.

I dont agree with some comments about responsibility. I am very responsible except I am unemployed at the moment. I panicked a bit for a few months and HAD to use the card to pay those things called bills (no electricity or having a crash without insurance aint no fun). So basically its a "robbing Peter to pay Paul" situation isnt it?

I havent touched/used the card in months, what I was saying was 70 Euro a month (whether I am working or not) is alot to be paying on a 1300 debt.

Few questions:

What cards/company are offering 0% interest/better rates?

And as well, would my bank be piss*d at me or frown on me (say if I ever wanted to get a loan/mortgage in the future) if I change to another credit card company.

I pay enough per quarter for bank services (which are terrible also). Are there any banks that provide free banking? (and even better with 0% interest credit card?)

Thanks again.

RainyDay

esperanza wrote:

The only people who profit from credit cards are the banks.

Not true - I earn 1% of everything I spend on my Amex Blue card. I did a lot of business travel this year and came out a couple of hundred quid up.

But OP is crazy to carry this kind of debt on a credit card on an ongoing basis. 1) Cut up the card 2) Transfer the debt to a zero/low interest offer (and cut up the new card as well) 3) Clear the debt, and don't get a new card until you can be sure that you'll pay off the full amount every month.

DublinWriter

janS wrote:

I feel a bit claustrophobic or panicky...
My credit card is with one of the major national banks. if I decided to change to another company for credit card (say one with less interest or first 6 months interest fee or something) would this affect my chances of getting a loan/mortgage with this bank in the future? Would they look less favourably on you because of this?

I'm not slagging you off here, etc, but there's a bit of the OCD / anxiety transferrence about your post.

Maybe circa 1982 it would have affected your rating with the Financial Institution, but not now. Banks make *serious* money from punters and would not turn down anyone they see as a good prospect. My personal, company and mortage accounts are with three seperate banks (shop around!).

My limit is 20K, and I'm at around 5K at the moment, but I usually clear up half my balance monthly and keep a close eye on the interest.

The trick is not to run up a debt that you can't repay easily in the space of three months and only have one credit card on the go at any one time.

Remember, it's not a limit, it's a target...only kidding!

Flukey

The best way to use a credit card is use it like a debit card. I have a credit card, but I use it in a "pay now, buy later" manner. So instead of paying off my Christmas presents bill in January, I have them paid for before I even start buying them. I use the card for convenience. I don't spend what I don't have. That is the mistake people make with them. As several people have said, it is not the way to use it. Every card can be a 0% one if you use it properly and pay off before the end of the month or pay off before you even spend anything in the first instance.

My card is a convenience, for buying over the phone or the net or occasionally when I am short of cash. When going abroad, by having a credit balance, you don't get charged extra to make withdrawals. That is another convenience of the credit card.

I don't buy what I can't afford. So my balance is normally in the black, or if it is in the red, it is only because I know that what I have purchased is something I can pay for shortly. I have mine for over 10 years, and I have still to pay even a single penny or cent of interest on it. So the simple rule is don't buy what you can't afford now or in the short term, and even better, employ a "Pay Now, Buy Later" policy. So go on, start loading up the credit card now, and come December you'll be able to buy loads of presents with no worries of a big credit card bill in January.

Paddy20

My bank has now started issuing Laser card customers, with Laser and Maestro combined cards. This means that you can shop online etc much more easily throughout Europe where Maestro is recognised and accepted for purchases and withdrawing cash from those hole in the wall cash machines. .

As for paying off a Credit card debt !. Get a 'personal bank loan' spread over, say '60 Months' at the lowest interest rate you can get and arrange too pay it off by Direct Debit over the loan period.

Even from your own personal bank, whose credit card interest appears to be ripping you off. The interest will be a hell of a lot lower than you are being charged by the CC, then when the full loan amount has been credited to your personal bank account. Pay off your credit card IN FULL.

Your own bank should have no problem with you doing this. It is referred to as 'restructuring' your finance's, and is very common, amongst the financially enlightened.

Good luck.

P.

esperanza

Paddy20 wrote:

As for paying off a Credit card debt !. Get a 'personal bank loan' spread over, say '60 Months' at the lowest interest rate you can get and arrange too pay it off by Direct Debit over the loan period.

P.

That's fine in theory, but imagine you are unemployed or have been in previous months, your bank is unlikely to give you a loan in this case.

Paddy20

esperanza,

Paying off a €1300 personal bank loan over 60 Months. Would cost very little per month, so even being unemployed should not effect your ability too pay the Direct debit.

Being 'Unemployed' is not in itself an automatic ban on you getting a personal loan. Your past credit rating/age/ personal assets/profile, etc, are all factors that are taken in too consideration !.

Banks make money by lending money at competitive rates. In this thread we are talking about someone concerned about a small credit card debt that is causing them worry, and it is usually sensible too pay off this type ' High Interest' debt, with a 'personal low fixed interest loan.

I have friends who were out of work/ unemployed and broke, yet they decided to become 'self employed', as you are never 'out of work' if you are self-employed !, they managed to convince the bank that they were a good risk, and managed to negotiate very substantial loans.

Banks charge interest on loans, because they take risks when lending money. That is the name of the game .

P.

BuffyBot

Being 'Unemployed' is not in itself an automatic ban on you getting a personal loan

It certainly doesn't go in your favour.

Gegerty

esperanza wrote:

Why do you need a credit card? (because your friends have one?, because you support capitalism?). If you earn a decent salary, then you shouldn't need credit, and if you don't earn a decent salary then get some more qualifications to get a better-paid job. Or, get a part-time job, set up a business on the side to get some extra cash. Look at ways to save money. That way you won't need loans or credit cards, and you won't suffer from claustrophobia.

The only people who profit from credit cards are the banks.

When are people going to wake up to that?

If you're sensible you can use your credit card for short term loans. With mine I have 56 days to pay it off before I get charged interest. I've been able to treat myself to a holiday this year when I couldn't afford it and I paid it off when I got back. That's a nice little luxury. Also my credit card covered my travel insurance, another nice little luxury. Come October I plan on putting half my evening course fees on the credit card and I'll pay that off within 56 days as well.

So basically this year I've had a holiday and I'm going to get myself some extra edumecation all thanks to my good auld flexible friend. What do the bank get out of it? Absolutely zilch.

They try to catch me out by increasing my limit. I'm up to €7,200 which believe me is a ridiculous amount of money for my salary!! They can try all they want but they won't trip me up.

Gegerty

esperanza wrote:

Why do you need a credit card? (because your friends have one?, because you support capitalism?). If you earn a decent salary, then you shouldn't need credit, and if you don't earn a decent salary then get some more qualifications to get a better-paid job. Or, get a part-time job, set up a business on the side to get some extra cash. Look at ways to save money. That way you won't need loans or credit cards, and you won't suffer from claustrophobia.

The only people who profit from credit cards are the banks.

When are people going to wake up to that?

If you're sensible you can use your credit card for short term loans. With mine I have 56 days to pay it off before I get charged interest. I've been able to treat myself to a holiday this year when I couldn't afford it and I paid it off when I got back. That's a nice little luxury. Also my credit card covered my travel insurance, another nice little luxury. Come October I plan on putting half my evening course fees on the credit card and I'll pay that off within 56 days as well.

So basically this year I've had a holiday and I'm going to get myself some extra edumecation all thanks to my good auld flexible friend. What do the bank get out of it? Absolutely zilch.

They try to catch me out by increasing my limit. I'm up to €7,200 which believe me is a ridiculous amount of money for my salary!! They can try all they want but they won't trip me up.

esperanza

Gegerty wrote:

If you're sensible you can use your credit card for short term loans. With mine I have 56 days to pay it off before I get charged interest. I've been able to treat myself to a holiday this year when I couldn't afford it and I paid it off when I got back. That's a nice little luxury. Also my credit card covered my travel insurance, another nice little luxury. Come October I plan on putting half my evening course fees on the credit card and I'll pay that off within 56 days as well.

So basically this year I've had a holiday and I'm going to get myself some extra edumecation all thanks to my good auld flexible friend. What do the bank get out of it? Absolutely zilch.

They try to catch me out by increasing my limit. I'm up to €7,200 which believe me is a ridiculous amount of money for my salary!! They can try all they want but they won't trip me up.

Ok, that sounds great, unfortunately most people aren't as intelligent as you!

janS

Thanks for the replies again.

Have the credit card for at least 5 years and have never had a problem - mainly cause I had a job.

I think its brilliant the way ye are all so great about managing your credit cards - some good ideas - the lesson I guess is to not use the card unless you have a job - in this sense I mean you have something coming in every month to pay the bill.

I have to add though that although I do appreciate the good advice, that some of the posts have been a bit shi*ty and condesending.

Im not looking to be judged.

Seriously.

Anyways back on topic, can anyone please tell me/name some other credit card agencies with good interest? I honestly dont know of other card agencies except those large national banks (please PM if you prefer).

Thanks again.

vector

esperanza wrote:

Why do you need a credit card? ...
The only people who profit from credit cards are the banks...

When are people going to wake up to that?

sidebar
the govt profit from cards also by taking EUR 40 pa.

anyhow I see what you're saying but even if you have cash bulging in your wallet you still need a creditcard to order stuff online

Sarsfield

Credit Cards can be excellent cashflow management tools too is used carefuly. I use my cc a lot (and pay in full every month). I'm basically deferring expenditure by 1-2 months on all my purchases. I could pay cash up front but choose to use the card and keep the cash in Rabobank earning me 3% for those couple of months.