Context: I have about 15k of racked up credit card debt from over the years. I currently have 4 cards with high ish limits of say around 8k each.
I’m currently living in ignorant bliss using balance transfers.
Me personally, I’m self employed and receive a variable wage, and end up paying out about £1200 a month in rent bills and my tax (putting to one side). I’m not totally insolvent as due to self employment I have extra coming in on top of that of about £800 to £1000 per month.
I’m absolutely shocking with money but I came up with a plan. I just want to know if this is a good plan or bad plan. As I’m not very good with money.
Idea:
Each month build up my bills pot so I have enough to transfer to my direct debits and tax (with one extra month as a buffer to be stored and kept).
Then once I’ve met the threshold for my bills and I know I’m covered for my next month, ANY ADDITIONAL INCOME (after business expenses etc., I simply pay straight onto the credit card.
Obviously I have to live, so I’m thinking mindset wise I will use the credit card to buy things with but my brain will be motivated to not touch it unless it’s essential (autistic brains are fab). So literally essentials from Iceland etc.
The reason I want to try and use this method, or my thinking behind it, is that I want to make regular payments instead of what I’ve tried before where I say right il save £500 this month and pay off my credit card. Then never do.
Sorry if you’ve switched off by now, but from a simply financial point of view will this work?
You're basically saying your going to use spare money to clear the debt which is sensible. Just make sure you prioritise the worst debt first, do minimum payments on the rest. Can you balance transfer any to 0pc to give you some breathing room?
Yes I’ve been swapping them around for years 🤣 I have 4 cards and two with balances and often say balance transfer now etc. So it’s not too late.
As long as you're keeping the interest to a minimal/0 you're doing the right thing.
Cut up the credit cards. Set a budget. You know your bare living expenses. Put a little extra aside for fun and then transfer the remaining onto the credit card and live within your means on your debit
I have tried this several times.. it doesn’t work for me :(
Well, you have to make it work somehow otherwise you're not going to clear this debt. Why doesn't it work?
Because I struggle to budget, hence why I thought just use the card for essentials but I’d still be paying massive chunks off. My work life is all over the place, some weeks I would be able to live off £20 food, and some weeks it would be £60 - but I can’t predict it.
Saying "I can't budget so I'll just live off credit cards" is just shunting the problem not addressing the issue. Which is that you are spending more than you earn.
Moving the account you spend out of won't help that, of itself.
Restricting what you spend, will.
Regardless of which accounts the money is coming out of.
What is there actually to stop the "Obviously I have to live, so I’m thinking mindset wise I will use the credit card to buy things" habits from kicking in.
You think, you'll just somehow stop. Hmm.
You're self employed but have no emergency fund (props to you for setting aside your tax money, well done, but that doesn't count of course). If I were you I'd be burning my arse to pay it all off then save.
Best wishes to you OP and a prosperous and well-budgeted 2026
My thought behind my method is that I don’t want to save it (because I’m likely to spending) so I want to save enough for my bills then any extra I will simply put straight on the card thus bypassing me seeing it and wanting to spend it. My motivation IS to pay off as much as I can and spend nothing else other than groceries. That’s the idea. But my problem (and I know it’s a mental issue) is that if I save it and have it sat in my bank account, my brain goes. “Oh yea I’ve got money so I can do that etc.. but if I whack it straight on the card it would be the equivalent of spending about £100 per month in Iceland on the credit card but over the month I’d be paying £800 in.. so at the end of the month I would have Paid £700 off?
Cut the damn cards up then you can’t use them. Pay £600-700 of and keep the other £100-200 in your bank account and use your debit card. Act like an adult.
Set the higher limit then. Give yourself £300/month for food. It don’t work because your budget was too aggressive
I totally agree with your approach and would recommend looking at the flowchart as well as the debt repayment page
A single consolidation loan to pay them all off over a time frame which makes the repayments manageable. And cut up the cards but maybe don’t close all the accounts, closing accounts adversely affects your credit rating, i’d leave myself just over £4,000 of active (although not accessible) credit. I did this (£20k over four years) a few years back
Without knowing your rates and minimum payments, it's hard to say whether this is suitable however the best solution is usually the snowball method, which targets the highest interest card first. If you've still got a good credit score, it might be a good idea to buy some time with balance transfers first though so you're not paying uneccessary interest while you tackle the first card.
I’ve got 4 cards 2 with balances on them but we’re part of a balance transfer so currently 0pc and one has about a grand on it which isn’t balance transfers it’s just purchases so I’d pay that one off first. I still have income and have never missed a payment. My credit rating is good. But I want to get on top of it and bring it down. And my method above is untried for me but I’ve tried saying right.. “I will save £500 this month and pay off a credit card”. It just doesn’t happen and I end up just making minimum payments.
OK so maybe do the £500 payment before minimum is due, as soon as you are able to - that way you're not accruing interest and you won't forget. The issue with "saving" or putting money aside when you have any debt is that you're still going to be charged interest on your cc balance and ideally you want more of that 500 to clear debt than pay off interest.
My thought behind my method, is that I literally save enough to pay my bills then as soon as my next lot comes in it goes straight on the credit card. Bypassing it being sat in my account and me being tempted to spend it.
Try YNAB, many people say it’s tough to get started on it but honestly it made sense immediately to my neurodivergent brain. Helps visualise where your money needs to go. And when you check budget first, before your bank balance, you really have to face what you are neglecting (be that a bill or a goal) when you want to spend money on non-essentials.
Thanks can I be silly? What is YNAB? Is it an app? Or website?
If you're autistic, why not get fanatical about it, and use software.
Gnu cash, firefly, money manager ex, all free open source options
Can you actually afford the minimum payments without using balance transfers? If you can't then you might consider a DMP
https://debtcamel.co.uk/debt-options/guide-to-dmps/
I’ve got 4 cards and balances on 2 the others quite frequently offer balance transfers so it’s pretty much all zero pc.. I have one which isn’t on balance transfer but it’s a small ish balance. Yes the minimum payments are included in the direct debits expenses of. £1200
Ok, sounds like a DMP would be of little benefit then, the main benefit is getting rid of interest.
So, get organised. I recommend software, but alternatively you can do it with excel. People have put a lot of effort into making software that gives you insight into what you're doing.
Hi /u/HammerToFall50, based on your post the following pages from our wiki may be relevant:
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If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including
!thanksin a reply to them. Points are shown as the user flair by their username.Even if you are currently managing in bliss with 0% balance transfers, there will come a time when you can't get another 0% card.
Provided you are able to keep new spending to essentials only, plan is good (but there are few cards which give both 0% on new spending and 0% on balance transfers).
As others have said target highest actual or potential rates first.
For the long term, it is essential to develop a live within means mindset.