I have two credit cards, one with a balance of £4500 and another with a credit balance of £2350 and a credit limit of £3000.
When I took it out, the lower limit card had an interest rate of 39% which increased to 59% and due to the fact that I have been making the increased 'persistent debt' payments has been reduced to 54%. I took out a 0% balance transfer card and was able to pay £540 (the maximum credit limit I was able to get was £600, I have not used the other £60 on the card and I am making the minimum payment, 0% period is 9 months) to try and reduce the interest. However, on my June statement the estimated interest for July is £135 and the monthly payment is £158.
The other card the initial interest rate was 19% but is now 39%. I pay the 'persistent debt' payment but then always need to use the available balance to live on so I am getting no where with it.
I have tried without success to get a loan to pay off the more expensive card at a lower interest.
I have no bad debts or missed payments and my credit score is around 560.
I am however, a single mum with two children renting from a housing association.
I work full time but around a third of my income is from Universal Credit.
I cannot see me ever making progress with these credit cards and due to the age of my children the Universal Credit will stop in 5 years time and I will struggle to meet the payments.
I feel I've paid enough interest on these debts, the credit providers have had their monies worth of interest and the hike in the rates is not justified.
I'm considering stopping paying these cards, waiting for a default to be served and then hopefully coming to an arrangement to pay the resulting balance off.
What, worries me is that I would be taken to court CCJs obtained and then get visits from bailiffs.
Or should I take a different approach?
Thank you in anticipation of your responses