Credit Card Tactics - need help

berneslai

Hi all,

I've got three credit cards on the go at the moment but due to my partners poor credit record (we have joint account and mortgage to link us together) and my previous credit "hunger", it's probably unlikely that I would get accepted for a new 0% card (despite having quite a good payment history, good salary and my own home).

I'm trying to rid myself of three balances. Ideally I'd like to contact one of my existing lenders and get a reduced rate, but my balances are spread relatively evenly and I don't know what to do. The cards are:

Virgin (MBNA card) - 15.9% APR - 0% deal expired 2 month ago - Credit Limit £8000 - Current Balance £1,350.
M&S Money card - 15.9% APR - 0% deal expired this month - Credit Limit £5,500 - Current Balance £5,200.
Lloyds TSB Card - 14.9% APR - 5.9% on balance transfers for 4 more months - Credit Limit £4,000 - Current Balance £3,800.

Current minimum payments are £100-£150 (M&S, Lloyds) and £30 (Virgin). After Xmas I can probably pay around £750-£800pm across all the cards.

Ideally I'd like to get rid of the outstanding balance on my Virgin card, negotiate a good deal (say 3.9%-5.9% for life of balance - possible?) and then move as much from the others as possible.

However, I don't know how to get rid of the outstanding balance on my Virgin card. I thought about transferring all the money from the M&S card to Virgin at 5.9% promotional rate and then negotiating with M&S for a lower rate, but the Virgin 2% transfer seems to negate any short-term benefit. Am I better off just taking the interest hit in the short term and paying off the Virgin card over the next 3 months?

Any help would be most appreciated,
Bernie

Robert_Sterling_3

You have had the benefit of 0% credit cards and now it is payback time.
You have about £10,000 out there at around 15% interest costing £1500 per annum.
I would pay off the Virgin card and close it within three months. You might otherwise be tempted to use some more of it's £8000 facility.

Reaper

Unless you have already been refused a new card then I'd try for one more at 0%. It won't be enough to cover all the balances but might help move the worst of them.

However you really need to get a grip on your debts. You should not have slept walked into a situation where your 0% deals have already expired before planning what to do next. You should have been asking this question 3 months ago.

The worst place to have a debt is on a credit card at full APR. If you have not already done so read some of Martin's articles on debt, in particular the options for moving money to cheaper rates - loans are another option as well as credit cards. Also consider low APR life-of-balance cards as then you won't have the same problem again in a few months when the deals run out.