Friend has debt, is a credit card an option to pay it off?

Keelann on 23/04/2019 - 20:56

Hi all,

My friend is quite unwell at the moment due to long term disability and is unable to do the legwork involved in research.

Basically they're on DSP, own an apartment and get rent money from a a tenant, so they have substantial stable income.

But mostly due to their illness they've let a lot of things in their life slide, one of which being fees associated with apartment ownership.

The nature of the debt excludes them from things like the NILS and StepUp, and next day loans are obviously awful.

I've tried calling National Debt Helpline on their behalf but they couldn't tell me much and basically just gave me a bunch of incorrect information.

I've never owned a credit card and neither have they, so I'm wondering if it's a decent idea for them to sign up for one of the no interest for 6 months etc credit cards, pay the debts then pay the credit card off over the 6 months?

They wouldn't need that long to do pay it off, and historically once they're aware of issues like these they don't make it worse (meaning they would actually pay it off and wouldn't add to the debt, and would most likely disable the card afterwards).

But are deals like this safe or are there things I don't know about?

This would be main contenders
https://www.nab.com.au/personal/banking/credit-cards/low-rat…
https://www.qantasmoney.com/credit-cards/premier-everyday

Or really any that have the 55 day no interest period, as they can get an advance DSP payment mid May.

I've gone over them but we're both quite anxious about credit cards in general and I really wouldn't want to make anything worse for my friend.

I'd really appreciate any advice/tips!

Financial

Comments

  • spackbace on 23/04/2019 - 21:01
    +2

    Basically they're on DSP, own an apartment and get rent money from a a tenant, so they have substantial stable income.

    Do they own the apartment or is there a mortgage?

    Shit credit file, no employment, yet you think they're gonna get a credit card?

    Cmon now…

    • Keelann on 23/04/2019 - 21:03

      I actually don't know how any of this works, when does a debt begin to effect your credit score? Also either way it was a good idea to post this as people might have other suggestions :)

      re your edit, they own the apartment but the apartment block is owned by a company (which to be honest I don't understand)

      • spackbace on 23/04/2019 - 21:11
        +1

        If they can pay their debts within 55 days, they should be able to talk to the companies involved and get extensions or a payment plan in place

        To what dollar value are we talking on the debt?

        • Keelann on 23/04/2019 - 21:13

          One is for 1.1k, another is for around 900. They're looking into that. The advance payment they'd receive would only cover some of the debt.

          • [Deactivated] on 23/04/2019 - 21:19
            +1

            @Keelann: You should be able to negotiate a payment for those amounts.

            • Keelann on 23/04/2019 - 21:23

              @[Deactivated]: Awesome, I'll let them know. Really appreciate the advice.

              • [Deactivated] on 23/04/2019 - 23:31
                +1

                @Keelann: Good work looking out for your vunerable friend (what ever the issues are), You hear too many stories of vunerable people getting credit cards etc when their is better options available.

          • Diji1 on 23/04/2019 - 21:23
            +7

            @Keelann: I'd attempt to negotiate paying the debt in installments rather than using any credit facility.

  • Ughhh on 23/04/2019 - 21:04
    +2

    Lending is already hard for an average Joe without credit problems.

    If you get declined, it'll hurt even more and lower the chances of the next loan.

    • Keelann on 23/04/2019 - 21:05

      Good tip, thanks!

      • Ughhh on 23/04/2019 - 21:10
        +3

        If a CC is really the only solution, don't apply online. Rather apply at your bank and ask what are the chances of approval given the circumstances. Staffs recommendation/reject won't appear on credit history- as long as they don't actually apply for you.

        Note that if your friend is not financially responsible or capable, a credit card could make things worst.

        • Keelann on 23/04/2019 - 21:12

          Sounds sensible. I'll ask them what they think.

  • Heaps for Cheaps on 23/04/2019 - 21:07

    I think it may be worth applying for a credit card, what's to lose, this is your best option for quick money… I mean if the loan isn't approved then that's what it is, don't go around lowering your score by seeking multiple loans though and research what makes you an attractive applicant, such as existing bank accounts… Also, apply early on in the month as banks also have monthly application-acceptance limits based on capital adequacy requirements, and you might have been apporoved if you waited until the 1st of the month instead of now.

    I believe that only purchases on the card will be marked as Interest-Free, and the % rate may vary depending on if you are making purchases. For example, I have a Commonwealth Bank Gold Mastercard and my rate is 13.24% on purchases after the 55 day interest-free period, but if I withdraw/transfer funds I pay 21.04% from the day of the transfer PLUS a 1.5% cash withdrawel fee…

    However, any way you do it, even at 21.04% + cash-advance fees, it will be MILES ahead of any payday lender/cash converters etc

  • Keelann on 23/04/2019 - 21:31

    Also off topic, I did a couple of (non affecting) online credit score checks for myself and apparently my rating is excellent? Wild because I'm a broke uni student, Good to know for emergencies though.

  • Meho2026 on 23/04/2019 - 21:45

    Get new friends

    • kahn on 23/04/2019 - 21:58
      +2

      Unable to do the legwork.

  • ikelin on 23/04/2019 - 23:22
    +2

    I'm actually Personal Banker at ANZ and based on what you've told me i'll give you this,

    Depends how much you are applying for and if it's not an insane amount, should be alright, you did mention you've never applied for a credit card as well.

    They might question the DSP which i assume is Disablity Support Pension and the tenant income. Employment or having a job is more favourable as an income source.

    But before you apply, there are credit agencies that have your credit score, such as creditsavy or EQUIFAX. Good idea to check before applying.

    Cheers,

    • Keelann on 23/04/2019 - 23:24

      Thanks!

  • shaybisc on 24/04/2019 - 14:50
    -1

    http://www.ndh.org.au/

    National Debt Helpline

    Give them a call.

    • nahkk on 24/04/2019 - 19:08

      I've tried calling National Debt Helpline on their behalf but they couldn't tell me much and basically just gave me a bunch of incorrect information.

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