Trying to clear my cards...getting knowhere fast

chris1969_2

Hello,

I have 2 credit cards which I am trying to clear to free up some money for myself each month.

On one card I stupidly withdrew about £1000 from the cash machine a year or so ago, as I was in between jobs & had bills to pay. So, the interest is sky high. Each month I pay £100 to the card & about £20 of that actually pays off the debt, the rest is in interest.

I'm really not sure what to do, surely the interest will come down at some point, but am I just throwing my money down the drain?

I tried applying for another card & doing a balance transfer but was refused, so what about a loan? From looking at the calculators, I will save myself about £20 pcm if I pay back the loan in 3 years.

Is this my best option?

latecomer

I would get a copy of your credit report and see if you can find why you've been refused credit. Things like missed payments are particularly bad.

Was the cash taken on both cards or just one? If its just one you could try and get the balance moved to the other card at a reasonable rate.

chris1969_2

The cash was taken out on just the one card. The credit limit on my "good" card isn't enough to do any significant transfer.

I've used the credit reports previously, there are some defaults for about 6 years ago, when I was out of work, but for the last 5 years I think everything has been ok.....it can't be that bad as m & my other half just got a mortgage!!

latecomer

Have you asked the company who refused you a new card why they turned you down?

I would still recommend having a look at your credit report to see if there is anything wrong or missing. Check the thread a few below this about credit ratings and improving them.

I'd say there was no harm in phoning up your exsiting "good" card provider and ask whether they would be willing to transfer the balance of your other card at a decent rate, you dont have much to lose.

BenL

Which card were you turned down for?

Were you maybe aiming too high? (Brand and customer wise?)

You may not have fit the customer demographic.

An MBNA or Capital One card may accept you for instance where as a Gold Card may not.

chris1969_2

BenL wrote: »

Which card were you turned down for?

Were you maybe aiming too high? (Brand and customer wise?)

You may not have fit the customer demographic.

An MBNA or Capital One card may accept you for instance where as a Gold Card may not.

I applied for a Halifax card, as I bank with them, I thought that would stand me in good stead...apparently not.

firesidemaid

which bank are you with? do they currently have any o% credit card deals?

you could go into a branch - i'm sure the staff would be eager to help as they get brownie points etc for each card taken out

chris1969_2

firesidemaid wrote: »

which bank are you with? do they currently have any o% credit card deals?

you could go into a branch - i'm sure the staff would be eager to help as they get brownie points etc for each card taken out

See above

Is it worth me speaking to my credit card people to see if they will lower the interest rate? Or is that like trying to get blood out of a stone?

chris1969_2

Speaking to my bank, I can get a loan to cover the card. Would the following scenario work - Get the loan, clear the card, then reverse the process (cleaning the loan with the card) so I will be back to my original APR (12%) with the card...not the APR (25% ish) I curently have (because of the cash withdrawal). That would mean I could clear the card in half the time....I think.

agsnu

chris1969 wrote: »

Speaking to my bank, I can get a loan to cover the card. Would the following scenario work - Get the loan, clear the card, then reverse the process (cleaning the loan with the card) so I will be back to my original APR (12%) with the card...not the APR (25% ish) I curently have (because of the cash withdrawal). That would mean I could clear the card in half the time....I think.

Loans often can't be redeemed all in one go - you won't be able to make overpayments over and above a certain threshold.

chris1969_2

glastowinebar wrote: »

Why go back to the card? why not just keep the loan and pay that off?

Good point, at least I won't be tempted to ring up more debt that way would I?