Dealing with debt before uni

Ok, so I don't need to be judged by saying "you shouldn't have got stuff on CC blah blah" I know...

My problem is I have around 3k in high-interest credit cards, due to having a mental breakdown, I became one of those "I need the stuff to deal with my issues" kinda person. I start uni in September and id like to be debt-free by the time I go there. I will have around about 200hrs of holiday from work which equates to roughly 1.8k and I'm pulling 60+ hr weeks.

Now I'm not on a decent wage by any stretch of the imagination but I can see that going to uni with the debt will play havoc with my anxiety about money, so much so that I'll repeat the process of buying things to deal with the issues and I'm not too sure if I'll have time for a "job" per se as I will be doing a healthcare course. I get the maintenance loan as well as the 5k from the government to pay for things but I don't want to be reliant on that money as students can't exactly go splashing the cash all the time. I won't be able to ask family for a loan either as, for my on fault... I'm too proud to let them know that I'm struggling.

So any ideas would be greatly appreciated :smile:

Reply 1

claireestelle

22

Original post by richmkay

Ok, so I don't need to be judged by saying "you shouldn't have got stuff on CC blah blah" I know...

My problem is I have around 3k in high-interest credit cards, due to having a mental breakdown, I became one of those "I need the stuff to deal with my issues" kinda person. I start uni in September and id like to be debt-free by the time I go there. I will have around about 200hrs of holiday from work which equates to roughly 1.8k and I'm pulling 60+ hr weeks.

Now I'm not on a decent wage by any stretch of the imagination but I can see that going to uni with the debt will play havoc with my anxiety about money, so much so that I'll repeat the process of buying things to deal with the issues and I'm not too sure if I'll have time for a "job" per se as I will be doing a healthcare course. I get the maintenance loan as well as the 5k from the government to pay for things but I don't want to be reliant on that money as students can't exactly go splashing the cash all the time. I won't be able to ask family for a loan either as, for my on fault... I'm too proud to let them know that I'm struggling.

So any ideas would be greatly appreciated :smile:

First thing I would do, is check every single bill and outgoing you have and think do I really need this and if you do need it can you get a better deal (sometimes asking for an outside opinion on these is helpful, like you might see x amount on food is reasonable but it's actually quite a lot)

Go through all your stuff and sell what you don't need.
Depending on how bad your credit history now is i'd check to see if a balance transfer card is still an option for you.
Call the credit card company and see if an interest freeze is an option at all and get them to put a block on your card so you can't spend again.

Reply 2

richmkay

OP

14

Original post by claireestelle

First thing I would do, is check every single bill and outgoing you have and think do I really need this and if you do need it can you get a better deal (sometimes asking for an outside opinion on these is helpful, like you might see x amount on food is reasonable but it's actually quite a lot)

Go through all your stuff and sell what you don't need.
Depending on how bad your credit history now is i'd check to see if a balance transfer card is still an option for you.
Call the credit card company and see if an interest freeze is an option at all and get them to put a block on your card so you can't spend again.

A balance transfer is out of the question, unfortunately, As for buying things I don't really need, that's stopped altogether. I don't pay for fuel anymore as I've managed to get work to give me a car (I work delivering cars for people) so that's saved a HUGE amount.

Giving the credit card company is a good shout, ill get that done tomorrow. My only concern is if I have an emergency and need to get something with credit. High-interest cards are so scummy! I keep on beating myself up over it!

Thank you for the advice though :smile:

Reply 3

claireestelle

22

Original post by richmkay

A balance transfer is out of the question, unfortunately, As for buying things I don't really need, that's stopped altogether. I don't pay for fuel anymore as I've managed to get work to give me a car (I work delivering cars for people) so that's saved a HUGE amount.

Giving the credit card company is a good shout, ill get that done tomorrow. My only concern is if I have an emergency and need to get something with credit. High-interest cards are so scummy! I keep on beating myself up over it!

Thank you for the advice though :smile:

what's your situation for car insurance, any possibility you could get a cheaper option on that, same with your phone bill if you have them?
Generally the advice would be to have a bit of emergency savings whilst sorting your credit card situation but since you've set yourself a short deadline, i would just aim to be as careful as possible.

It sounds like you've learnt where you've gone wrong and you can put a plan in place to fix it
Debt isn't so bad when it's controlled but hopefully you can get yourself out of this and then have emergency savings for the future. For example, there's nothing on my credit card but I have a home improvement loan and mortgage but they're perfectly undercontrol and I would pay them back earlier, it's learning where you can go wrong and avoid that.

Reply 4

Reality Check

22

Original post by richmkay

Ok, so I don't need to be judged by saying "you shouldn't have got stuff on CC blah blah" I know...

My problem is I have around 3k in high-interest credit cards, due to having a mental breakdown, I became one of those "I need the stuff to deal with my issues" kinda person. I start uni in September and id like to be debt-free by the time I go there. I will have around about 200hrs of holiday from work which equates to roughly 1.8k and I'm pulling 60+ hr weeks.

Now I'm not on a decent wage by any stretch of the imagination but I can see that going to uni with the debt will play havoc with my anxiety about money, so much so that I'll repeat the process of buying things to deal with the issues and I'm not too sure if I'll have time for a "job" per se as I will be doing a healthcare course. I get the maintenance loan as well as the 5k from the government to pay for things but I don't want to be reliant on that money as students can't exactly go splashing the cash all the time. I won't be able to ask family for a loan either as, for my on fault... I'm too proud to let them know that I'm struggling.

So any ideas would be greatly appreciated :smile:

You're being very sensible with this. It's a disastrous plan to go to university with debt like this, which will obviously need servicing and have dire ramifications if it isn't. Students simply don't have the spare cash to repay debts (or rather, keep them standing still by shelling out on interest), so it's imperative that you get rid of them before you go up to uni. When you say 'high interest', what are we talking? North of 30%? And is the reason you've got high-interest cards because you have a poor credit rating due to previous issues? This is relevant because if so, it limits your options for dealing with it.

I think you're making a mistake by not asking your family for help. I understand the pride thing, but wouldn't approaching a family member with a reasonable, semi-commerical plan be less like holding out a begging bowl, and more like being sensible and doing what you can to resolve the situation? You obviously need to do a budget, but could you for instance pay down 70% of it, and borrow the remaining 30% from your family - with a written agreement to repay it at £X per month (i.e. affordably) at a 5% p.a. interest rate. That way, you're assuaging any 'guilt' by coming to a reasonable arrangement, rather than just holding out your hand for cash.

As to your late post about wanting to keep these cards 'for emergencies' - this is a bad idea. You've already made it clear that you've run up a debt on them which you couldn't really afford to repay, and a debt created by buying things you didn't really need (or probably even want). I know it sounds sensible to keep one of these cards for a cashflow emergency, but I think the temptation to spend on them will be too great - particularly when you're at uni and money is tight anyway. Get rid: if your credit rating isn't too terrible, you can access a 0% interest free overdraft via a student account. This also gives you another option, by the way: if you have enough money to go to university without needing that 0% overdraft, you could actually 'convert' the remaining debt on the cards by taking the 'free' overdraft money and paying down the remaining credit card debt with that. This would give you a 3-4 year 'window' to repay the overdraft (and it would be reduced in a structured way once you'd graduated anyway), but does mean that you then don't have access to these OD funds for everyday student 'living', which might make this idea unworkable.

Reply 5

999tigger

19

Original post by richmkay

Ok, so I don't need to be judged by saying "you shouldn't have got stuff on CC blah blah" I know...

My problem is I have around 3k in high-interest credit cards, due to having a mental breakdown, I became one of those "I need the stuff to deal with my issues" kinda person. I start uni in September and id like to be debt-free by the time I go there. I will have around about 200hrs of holiday from work which equates to roughly 1.8k and I'm pulling 60+ hr weeks.

Now I'm not on a decent wage by any stretch of the imagination but I can see that going to uni with the debt will play havoc with my anxiety about money, so much so that I'll repeat the process of buying things to deal with the issues and I'm not too sure if I'll have time for a "job" per se as I will be doing a healthcare course. I get the maintenance loan as well as the 5k from the government to pay for things but I don't want to be reliant on that money as students can't exactly go splashing the cash all the time. I won't be able to ask family for a loan either as, for my on fault... I'm too proud to let them know that I'm struggling.

So any ideas would be greatly appreciated :smile:

If its not paid before then will you have time and opportunity during the degree?
If not just take a gap and get some savings.
Get your debt repayments sorted.

https://www.stepchange.org/

Reply 6

richmkay

OP

14

@clairestelle Car insurance-wise, I'm paying 40 a month for it (being old has its advantages) and the sim only is 18. I have defiantly learnt from this mistake!

@realitycheck Interest rates are 40% which looking at it now, is absolutely mental! I pay off 200 a month on one card and the interest alone is 80 on it...

Asking family for help to me, is kind of like an admission of guilt that I've been irresponsible with money, which would concern me if a relative came to me and said: "Richmkay, I've got myself into some debt by being stupid with money, any chance you could lend me some?" Does that make sense?

As a mature student, I've done my partying so going out and spending so much money is past my time now and id much rather do something at home. I'll be staying in halls as its actually cheaper than where I currently live. I did think about moving out for 3 months but its been such a mad time recently, I'm settled here so to move for a few months to save maybe 70/80 a month really isn't ideal.

And finally, that's my problem... my credit score is so low that I can't access the student overdraft facility which is my reasoning behind keeping ONE CC active.

@999tigger I can get it repaid, that's why I'm pulling all the hours I can as well as really cutting back on my expenditure. I'm just concerned that being a student will affect my credit score even more.

Reply 7

999tigger

19

Original post by richmkay

@clairestelle Car insurance-wise, I'm paying 40 a month for it (being old has its advantages) and the sim only is 18. I have defiantly learnt from this mistake!

@realitycheck Interest rates are 40% which looking at it now, is absolutely mental! I pay off 200 a month on one card and the interest alone is 80 on it...

Asking family for help to me, is kind of like an admission of guilt that I've been irresponsible with money, which would concern me if a relative came to me and said: "Richmkay, I've got myself into some debt by being stupid with money, any chance you could lend me some?" Does that make sense?

As a mature student, I've done my partying so going out and spending so much money is past my time now and id much rather do something at home. I'll be staying in halls as its actually cheaper than where I currently live. I did think about moving out for 3 months but its been such a mad time recently, I'm settled here so to move for a few months to save maybe 70/80 a month really isn't ideal.

And finally, that's my problem... my credit score is so low that I can't access the student overdraft facility which is my reasoning behind keeping ONE CC active.

@999tigger I can get it repaid, that's why I'm pulling all the hours I can as well as really cutting back on my expenditure. I'm just concerned that being a student will affect my credit score even more.

Speak to step change and work out the most orderly way to pay off the debt.
Go on monesavingexpert to look at rehabilitating or building your credit score. I believe others have built their up, even when a student.

Reply 8

Reality Check

22

Original post by richmkay

@clairestelle Car insurance-wise, I'm paying 40 a month for it (being old has its advantages) and the sim only is 18. I have defiantly learnt from this mistake!

@realitycheck Interest rates are 40% which looking at it now, is absolutely mental! I pay off 200 a month on one card and the interest alone is 80 on it...

Asking family for help to me, is kind of like an admission of guilt that I've been irresponsible with money, which would concern me if a relative came to me and said: "Richmkay, I've got myself into some debt by being stupid with money, any chance you could lend me some?" Does that make sense?

As a mature student, I've done my partying so going out and spending so much money is past my time now and id much rather do something at home. I'll be staying in halls as its actually cheaper than where I currently live. I did think about moving out for 3 months but its been such a mad time recently, I'm settled here so to move for a few months to save maybe 70/80 a month really isn't ideal.

And finally, that's my problem... my credit score is so low that I can't access the student overdraft facility which is my reasoning behind keeping ONE CC active.

@999tigger I can get it repaid, that's why I'm pulling all the hours I can as well as really cutting back on my expenditure. I'm just concerned that being a student will affect my credit score even more.

Thanks for the detail. Yes, I suspected the score might be too low to access further credit, and that would include a student overdraft: so that's my idea in the bin!

I get what you're saying about the family thing, but I think there's a difference between borrowing money from your family to repay commercial debt where there seems to be no learning from the situation from your end, with borrowing a small sum to finalise repaying debts where you've already shown that you yourself have done everything you can to improve the position, and just need a little help to 'finish it off'. Part of showing this commitment to change would be to cancel the cards. In the end, it's up to you regarding borrowing money from your family, because this is a very personal decision. I would still recommend it though.

At 40%, keeping a card is literally a disaster waiting to happen. It's not going to be remotely useful to you as 'emergency credit' when that credit cannot possibly be repaid or even serviced. I really think you need to remove any temptation to do this by closing those accounts. I obviously don't know the state of your credit file (in terms of late payments, overlimits, defaults etc), but is the timing of any negative information such that your 'score' would improve enough to enable you to open a standard student bank account at some point during your studies? If so, does your budget mean you can cope in the interim period without needing to borrow more money?

Dealing with debt before uni

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