Should I do this?

vicky_kidder

Hi everyone. I need some advice on a sensitive issue and can't speak about it to people who know me so any help is greatly appreciated!

My parents are in a rather sticky situation and have a fair bit of debt, and with the bite of the credit crunch they are finding it harder to deal with. THey have credit card and loan debts, and all but one have agreed to freeze the interest for the time being.

I have a pretty good credit score (with no debt myself) and got a letter confirming I can get a mbna credit card with 0% on balance transfers until October 2009.

So firstly, could I transfer their £5,000 credit card debt into my name on this card?

Secondly, does 0% on balance transfers for 12 months mean that they wont have to pay interest on the money if they pay it off in 12 months?

and thirdly, is this a wise thing for me to do? I mean, I'm looking at buying a house myself at the end of next year, and will having this debt in my name hinder me getting a mortgage?

By the way, they would still be paying the debt themselves but just in my name so they could get the 0% to help them pay it off more quickly.

Thanks to all who offer any advice. :j

isgman

IMHO, I don't think that this is a good idea. MBNA can get VERY NASTY is you every miss payments, ask yourself, is it worth putting yourself into £5K of Debt ? what have your parents said about your idea? if they are only making small payments now, what happens after the12 Month zero percent ends and the re-payments go up ? where will they find the extra cash? or will you end up paying! sorry if this sound negative.. Good Luck

rog2

Hi VK - I admire your intentions and your parents are, indeed, lucky to have a daughter who is interested in helping them to deal with their 'debt' problems.

I am, and that is speaking as a parent who has had very serious debt problems, however going to advise a note of caution regarding your possible intention of 'borrowing' to help them, at least without exploring all of the other options first, and would very strongly suggest that you, or your parents, have a chat with one of the Debt Counselling Charities, such as:

National Debtline www.nationaldebtline.co.uk 0808 808 4000

CCCS www.cccs.co.uk 0800 138 1111

Or your local CAB

Their advice will be free, professional and totally confidential.

Please do this before comitting yourself to debt, albeit for the best of intentions.

Thank you

vicky_kidder

isgman wrote: »

IMHO, I don't think that this is a good idea. MBNA can get VERY NASTY is you every miss payments, ask yourself, is it worth putting yourself into £5K of Debt ? what have your parents said about your idea? if they are only making small payments now, what happens after the12 Month zero percent ends and the re-payments go up ? where will they find the extra cash? or will you end up paying! sorry if this sound negative.. Good Luck

Hi, Isgman, thanks for your input. THey are planning to pay off the entire amount in the 12 months by setting up a DD. They like the idea and if it was to go ahead, I would have to sdet up some rules for that they would definitely have to abide by (i.e. no missing any payments etc).

I would do anything to help my family, but is it realistic that they will stick to my rules as they are my parents?

Burlesque_Babe

You can't change the name on the account from theirs to yours.

If there is a 0% offer for 12 months and the debt is paid off within the 12 months, then no, there will be no interest charged.

When you apply for a mortgage, the lender will look at the amount of debt in your name against your salary and the amount you want to borrow. With a good credit rating, a good deposit and a good salary, a £5000 credit card debt might not be a huge factor as long as they don't feel it adds too much risk to you as a borrower.

Only you can decide if you want to help your parents, but you could well find yourself with a debt after 12 months which ends up climbing as the APR will more than probably jump quite high (MBNA are nice like that :rolleyes: )

vicky_kidder

rog2 wrote: »

Hi VK - I admire your intentions and your parents are, indeed, lucky to have a daughter who is interested in helping them to deal with their 'debt' problems.

I am, and that is speaking as a parent who has had very serious debt problems, however going to advise a note of caution regarding your possible intention of 'borrowing' to help them, at least without exploring all of the other options first, and would very strongly suggest that you, or your parents, have a chat with one of the Debt Counselling Charities, such as:

National Debtline www.nationaldebtline.co.uk 0808 808 4000

CCCS www.cccs.co.uk 0800 138 1111

Or your local CAB

Their advice will be free, professional and totally confidential.

Please do this before comitting yourself to debt, albeit for the best of intentions.

Thank you

Thnak you for your advice. I know it does seem a bit risky, but I will see if they will ring those numbers first to see what they can do.

Mudbath

This is a really difficult one. I was in the same situations a few years ago and eventually decided not to get an interest free card for my mum. I felt very guilty but she eventually defaulted several payments on the cards she already had. I don't know if she'd have kept to payment if it had been in my name but I guess if you do it you need to make sure you have the money to make the payment if your parents don't. Good luck xx

SerenaGoode

vicky_kidder wrote: »

Hi, Isgman, thanks for your input. THey are planning to pay off the entire amount in the 12 months by setting up a DD. They like the idea and if it was to go ahead, I would have to sdet up some rules for that they would definitely have to abide by (i.e. no missing any payments etc).

I would do anything to help my family, but is it realistic that they will stick to my rules as they are my parents?

Good on you for trying to help in a difficult situation. One concern I have with this:

Presumably the balance they want to transfer is the one creditor who won't freeze the interest rates. In a sense if they pay that bill off this way they are letting that provider off scot free when further pressure and perseverance with the DMP may force the lender to back down. Why take the risk off taking on this debt - you are potentially helping the lender out more than your parents.

Also as someone said, MBNA can be !!!!!!s in a variety of ways. I have an MBNA card that they hiked the rates up to 35%. Even if it starts low they tend to push rates up. You need to assume that you may be stuck with this debt, no matter how hard your parents try to repay it, as it will be more urgent for them to pay the other lenders than to pay this one - meaning that if they have problems you may end up jointly deciding to pay this one off over a longer period. In this case you might be better off getting a low-interest rate for the life of balance card rather than one like MBNA which can explode. And they are horrible people, there are other card issuers who behave better than them in general. If you end up with a credit card out of this why not get one from a provider who are vaguely decent in their behavior rather than falling for MBNA's 0% rate (bearing in mind it will attract a 2.9% fee at the start in any case when you do the transfer.)

Good luck, whatever.

CLAPTON

Is 5000 their total debt?

Have they addressed the issues that cause the debts in the first place

If they can afford to repay 5k in a year then although it may take them 14 months with the extra interest, it doesn't seem too much of a problem just paying their own debt without involving you

vicky_kidder

CLAPTON wrote: »

Is 5000 their total debt?

Have they addressed the issues that cause the debts in the first place

If they can afford to repay 5k in a year then although it may take them 14 months with the extra interest, it doesn't seem too much of a problem just paying their own debt without involving you

Hi. Unfortunately, no this is not their only debt, just the debt on one specific card. The interest is really high on it and they wanted to transfer to a 0% card but don't know if they can because of credit rating etc, but know that I definitely can.

And unfortunately no they haven't addressed reasons for being in debt, but I don't think I should say this reason as I don't wanna be disrespectful to my parents, you know?

Sorry to ask for peoples help though without giving the full story!

CLAPTON

vicky_kidder wrote: »

Hi. Unfortunately, no this is not their only debt, just the debt on one specific card. The interest is really high on it and they wanted to transfer to a 0% card but don't know if they can because of credit rating etc, but know that I definitely can.

And unfortunately no they haven't addressed reasons for being in debt, but I don't think I should say this reason as I don't wanna be disrespectful to my parents, you know?

Sorry to ask for peoples help though without giving the full story!

in that case definitely do not lend then any money at all... but refer them to CCCS payplan CAB