Hi guys...just wondering if you have any opinions on this. So I have 8k credit card debt now. I do have savings which will cover this but I will be left with only a small emergency fund if I go this route. I know the credit card is 1.52% on the full balance per month so this would cost me in interest. This is the route that I thought I would chose...but now am wondering if it is better to just leave my savings in tact and hit this credit card as hard as I can every month. Maybe it will act as a reminder of the trouble Ive got myself into?. I reckon I could beat it down in 6-8 months with projected income. What would you do...clear it completely with savings and start saving again...or hammer the heck out of it til its gone? (meanwhile Im working on my addiction and prevention...I just need to solve the financial issue in my head first) Thanks -:
In my experience, every gambler, after a heavy loss or series of losses, does the same thing - try to rationalise the situation; look at how they can make good the loss, in time. I've done the same thing, many times.
You are doing the same. You have an £8k debt, much of which, I assume, relates to gambling losses. You need to clear this, but how? You could, on the one hand, beat it down, as you say, by offsetting the debt out of your monthly income. Alternatively, you could pare it down gradually - after all, 1.52% is an excellent rate. Your savings would yield a similar interest rate: therefore, you will keep a balance.
BUT .... and it's a big but .... there's an elephant in the room. And that elephant is your gambling addiction. Whether you pay off the debt out of the savings, or income, or whatever, is neither here nor there, right now. Because things could get a LOT worse and now's the time to get a handle.
The truth is you need to get in control of your addiction, and fast. Do that, and everything will take care of itself. The good news is that you ARE doing something about it, and all credit to you for this. I mean that; if you realise you have a problem then you truly are half way there.
To this end, may I offer my thoughts. Please consider three things. One, handing over full financial control to a trusted friend or loved one. Then, you can't gamble, even if you wanted to. It shows intent, and it will be appreciated more than you can imagine.
Two, put into place meaningful blocks; so resolute and thought out, that you can't gamble even if you wanted to.
And three, seek the support you need to spritually help you; councelling and GA helps us all understand, rationalise and help with our infuriating, yet so damaging, addiction. Councelling is FREE with Gamcare by the way - just phone up and ask!
Dealing with your debt WITHOUT facing the real issue - compulsive gambling - is just tinkering at the edges. Deal with the gambling and everything will slowly, but surely, start to fall into place.
I hope this helps.
Mixer
Like Mixer said, i did the same at first. After a little while you realise you can pay the debt down and still live life. Find the balance and clear it off at a steady pace or smash it every month and scrape by until its gone. I say focus on not gambling, go steady with manageable payments for 2/3 months then reassess things once the gambling has settled and real recovery has started.
Weigh up the pros and cons of each but don't rush into a choice that you will regret or that brings your mood/situation down any more then is needed or recovery won't be the focus and long term that is what matters. Improving your daily life situation and the why you gamble should be the main focus. The debt will decrease either way if you work on stopping.
All the best.
Absoutley 100% agree with you on every point and thanks for taking the time to reply. The 1.52% is high...thats per month..so its 18.24% interest on the credit card. I am absoutely aware that paying off the debts means absoutely nothing unless I tackle the addiction as you said. I have been in this situation several times and that why I am back here again...because I never did any of those things before. I wasnt even really aware of all this til this latest binge that started in december. Since then, I have put blocks in place but not enough. I need them to be completely tight so that I dont find myself back here again. I know working on the debt seems like the wrong approach...but at day 2 that is the thing that I have a big hang up about...I feel I need to have a plan in place in my head with that first to be able to move forward. But you are right, the addiction stuff needs to be tackled first. Thanks again for your advice...I am getting one step closer every day.
Hi, can I ask if you can prove you where gambling before you took those loans? Do they show in your bank statements?
Basically affordibility is not just how much you earn its how much you spend also. So if you can show that you where a problem gambler prior to those loans you have a case with the Financial Ombundsman. They can refund interest and keep your credit file from getting adverse scorings.
Hi problem gambler....I havent taken the loan. I have decided not to take it....mentally I feel better not taking on a loan if I can use a combination of savings and hard work to reduce the debt. The other loan I have was for home improvements, it was a 3 year loan which finishes in 3 months. It was from another institution not linked to my main bank account (which is the one with the credit card I did damage on). I think I have a good credit score...always paid mortgage on time...always paid this loan on time..no missed payment...no missed payments on credit card etc. Do the banks really care if you are a problem gambler...I mean no matter what I spend on the credit card...if it is paid on time etc...do they care?. Its profit for them with interest, this is how they make their money?. I know gambling can affect your credit score if you are applying for a mortgage...but does it still affect credit score if you pay everything on time?...
I would ask myself what do I need an emergency fund for? It’s not savings if you owe money & surely paying off the credit card would still leave you with the same buffer should there be an emergency as the credit card would be clear again. From what I understand, it’s better for a credit rating to be making regular payments but why does this bother you so much?
Stop focusing on what is clearly a serviceable debt & start figuring out how to live a more fulfilling life...You are heading in the right direction but as previously mentioned, getting your addiction under control is the most important factor here.
Thanks ODAAT. I dont know...I dont undertand it myself but for some reason owing money on my credit card bothers me so much...it always has, even if its a few hundred quid that I can pay back , it really makes me uneasy. You hit the nail right on the head there by saying...start figuring out how to live a more fulfilling life. Its great that someone else says that...I can actually hear it being said out loud! Thats excatly it...and I must say these last few days...something has lifted in me...something has changed. Maybe I did need to go back and hit my new rock bottom to finally take stock and look at my life overall...and start making some positive life changes. And I actually feel positive today, even though I have a mountain of debt. It is servicable and I will get there.I feel like I have finally had my wake up call...I feel very different this time. Hopefully this feeling lasts...
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