hi i,m NEW to this and need advice

*dmb*

i,m really new to this but need some help and advice i have a credit card maxed to 5500k and i,m only able to pay the min amount * just *someone told me about transfering my balance for % or something i also have a morgagae /loan to pay which i,m struggling with but just about managing to keep my head above water as they say but i want to get debt free please help whats the best way to go

anotherpaul_2

First off, if it comes to a choice of which to pay, the mortgage and anything secured against your house comes first. The credit card is unsecured and its better not to pay that one rather than the mortgage (though obviously better to pay both.)

The other options depend on your financial situation. Are you working? And is your credit history good? No missed payment or CCJs?

If you have a good history, another card and transferring the balance from the expensive card to that would be an option. The virgin money card offer is pretty good (0% for 16 months), but only if you prepared to move it again when the offer expires. Otherwise you might want to consider a low interest for life of balance card.

If you have a lot of equity in the house, you might be able to extend the mortgage to pay off the cardit card which would reduce the payment and the interest BUT this is turning unsecured debt into secured debt and will increase the amount to time needed to pay off the debt. So care should be taken on this option.

*dmb*

thanks for the info i haven,t got a bad credit or any ccjs etc all my bills are all up to date no missed payments but i feel i,m going unders slowly but surely!
i really need to try to get things in order i'm not working at the moment but plan to once my youngest goe's to full time school in september (i,m a widow) so doing this on my own i have 3 dependant children
i will try maybe that virgin credit card with % interest would it be just a case of applying for a card ? and then paying the other one back etc
by the way i thank you very much great advise x
deb

jonesMUFCforever

2 things to look at.
1 Make sure that you are claiming everything you are entitled to - CAB may help you here.
2 Work out where the money has got to and try to cut back your spending - easy for me to say I know.

Go over to the debt free wannabe board - they will give you plenty of good advice.

garethjv

Don't know if you've seen this http://www.moneysavingexpert.com/cards/cut-credit-card-interest but it might help if it's appropriate to you.

You should definitely make a list of your monthly outgoings and incomings and see if there's any way at all you can reduce those outgoings for a few months to try to get your debt down. And as the earlier poster said, always pay your mortgage off first and then worry about your credit card and never fall for one of those stupid loans that tie all your unsecured debt into a secured loan.

Best of luck

anotherpaul_2

*dmb* wrote: »

i will try maybe that virgin credit card with % interest would it be just a case of applying for a card ? and then paying the other one back etc

Hi Deb

If you have no income, you'll probably not get a new card - or not one with much in the way of limit - unfortunately. There's probably no harm in applying though.
(If you do get one, it would just be the case of phoning them and asking about balance transfers.)

So my (non-expert) advice would basically be the same as jonesMUFCforever suggested, and try to stay above water until September.

One more option might be to approach your mortgage company and ask if they would convert your mortgage to interest only (or part interest only) for 12 months. They might go for it rather then have you default. But, it would definitely be worth talking to someone like the CAB before doing that. I might be giving very bad advice.

Paul

*dmb*

hi paul although i don,t work i do get a good pension and widows benifit i also get ctc etc so money coming in is good ish i have never had a problem or been refrused credit so hopefully fingers crossed i had no ccj or non payment of bills or anything i was only late once for one bill i forgot to pay before i went away for a month but once i got back explained and they were fine but thats it all my bill are you to date all bills are paid at min mind you but i do try to pay a bit more if i can but often can't
don,y know what credit card would be best mind you any ideals
deb

anotherpaul_2

(Hopefully some of this is helpful and not telling you too much that you already know or is blindingly obvious.)

That's a more complicated question than it first appears. Since you're primary concern is reducing the minimum rather than reducing the interest to pay it more quickly, the obvious answer of "the one with the longer 0% offer" doesn't necessarily apply. So, I'll give it a go.


Most cards charge minimum payment as a % of the balance. However, the MBNA cards (Virgin for example) charge £25 no matter how big the balance. So, you need to do some maths here (google if you don't have a calculator to hand!).

Calculate 25 * current balance / current minimum repayment
so for example, if you're current minimum repayment is £165, you'd get:
25 * 5500 / 110 = 1250

You need to be able to transfer at least this amount (or whatever you get in your calculation) to be reducing your minimum payment. This is a relatively small number, so it's likely that you could do this, so Virgin (or one of the other MBNA cards is probably the place to start). Note that if you transfer less than the amount you get from the calcuation, your total minimum repayment will actually increase.

After MBNA, or if they're no good, you'd need a card where the minimum payment is a smaller percentage than you currently pay. Egg is 2%, for example.

Obviously, in the longer term, transferring balances to 0% will also reduce the balance more quickly, which will bring your minimum payment down eventually too.

It might be worth giving which ever card company you choose a ring first and talking about your sitution (income-wise). They might be able to give you an idea of whether they're likely to offer you a card, before you authorise them to search your credit history. Though, personally, I'd always do the actual application online.

Once you've transferred some or all of the balance, you might want to consider a card with 0% on purchases, then you could spend one that, pay the minumum and use the rest of the payment to pay off whatever remains on your existing card, then put in a savings pot to pay the purchase card (or the 0% card if that offer expires first) just before it stops being interest free. You need to be careful with this that you don't end up spending more than you save and building more debt - it's all too easy (speaking from experience...).

Apply for the balance transfer card first though, since too many credit searches can cause you not to be offered credit (they diappear after 12 months, so it's a short term thing).

Whatever you do, don't spend anything on the new balance transfer card though.