Trying to clear my cards...getting knowhere fast

jimbo26

Get a loan and pay off the card, then cancel it.

mintymoneysaver

Egg do loans that can be paid off at any time?

Ally5002

I have in the past taken out loans to clear credit card debts, the interest rates have always been much cheaper than on the card and I have found it much easier to clear the loans. However, the mistake that I made was not cutting the credit card up straight awy, it is so easy to run it up again.

gfplux

chris1969 wrote: »

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?

Hello Chris,
Do I understand correctly. You have a credit card that you owe £1000. Each month you pay £100 but £80 pounds is interest.
So over the last 12 months you paid £960 (12 times £80) interest on a £1000 pound debt.
and
Over the last 12 months you have paid £240 (12 times £20) off the Debt.
So
The debt is now £760 (£1000 less £240).
Are you sure you have been paying £100 every month.
and
Are you sure you have not added to the debt!
Perhaps I did not understand your post. Please let me know.

chris1969_2

Sort of. The amount I owe on the card is almost £3000 in total. This is a breakdown on my last statement:

Balance: £2938
Payment made: £100
Interest on purchases: £3.39
Interest on cash advance: £46.09
Balance Now: 2887
Min Payment Due: £73.00

The interest payment is coming down a few quid each month. I really need to know how long the interest on the cash advance is going to last.

I scrapped the loan from my bank idea as the APR was miles higher than the card.

I've just spoken to the credit card people, I actually withdrew over £2000 from cash machines. Sh*t!!

dhassen

generally, getting a loan to pay off credit card debt is a bad idea..... I'd suggest that you do get your credit files like a few people suggested, as a 0% CC deal is the best option here, as you can overpay as much as you want / can.

The interest on the cash advance is likley to be applied right until you pay the whole balance off, but you'd have to check your CC's own ts and cs for the order of payment stuff (can't remember the technical term, but basically - which bits of your card are paid off in what order)

chris1969_2

I've managed to get an credit limit increase on my other card which would clear half of the cash advance on the other...a sort of mini card balance shuffle. It's a start, but I'm still £1000 short of clearing the lot.

I'm not happy with the card suppliers general unhelpfulness though. Despite being very honest & open with them, they won't budge an inch. Granted, it's my own stupid fault for withdrawing the money, but the impression I get is that it makes no difference to them if I end up defaulting if the interest spirals out of my control.

firesidemaid

pay more off the higher rate balance if you can.

plus as you make payments off the lower rate, keep transferring more across - every little helps

BenL

chris1969 wrote: »

The interest payment is coming down a few quid each month. I really need to know how long the interest on the cash advance is going to last.

The interest on the cash advance will be accumulating until last as it is the highest profit the card company can make (unless its a nationwide card who pay the highest interest earning part off first)

gfplux

Hello Chris 1969,
It strikes me that you are getting there "somewhere" faster just by discussing your problem on this board.
Well done and good Luck