Pay which credit card first?

Jo4

My friend has approximately £10,916.54 credit card debt and is repaying £313 a month which just about covers the minimum repayments. The debt is spread over 6 cards, here is the details,

Capital One £1295.57, paying £39 monthly, apr 5.9% lob, min repayment 3%

CitiCard £2073.86, paying £72 monthly, apr 5.9% lob, min repayment 3%

Barclaycard Platinum £1595.99, paying £31 monthly, apr 5.9% lob, min repayment 2%

Barclaycard £1983.96, paying £49 monthly, apr 5.9% lob, min repayment 2.5%

Barclaycard Premiership £2386.09, paying £73 monthly, apr 5.9% lob, min repayment 3%

American Express £1581.07, paying £49 monthly, apr 2.9% lob, min repayment 3%

I read that you are supposed to pay the highest apr card of first but when they have all similar aprs which one should be paid first, the one with the least on it? I really do not know the answer to the question so if anyone can help, please do. BTW these cards are not used they are just for paying of the debt.

southernscouser

Is your friend is coping with the minimum payments or not? How much can she afford to pay each month in total?

Have a look at this calculator just to see how much difference paying an extra £50 a month for example can reduce how quickly you pay off the debt!

Also what is her credit rating like? Has she/can she apply for 0% card? I think HSBC are doing one with no fee for balance transfers but check the credit card board for more help!

Jo4

southernscouser wrote:

Is your friend is coping with the minimum payments or not? How much can she afford to pay each month in total?

Also what is her credit rating like? Has she/can she apply for 0% card?

THANKS for responding! My friend is coping with the minimum repayments but only just. The total he can afford to repay is £320, although if he gets anything extra he chucks it at the debt.

His credit rating is excellent, he has never missed a payment and he has everything up to date. He could apply for a 0% card but would there be much point when the aprs are all so low?

ms_london

Jo4 wrote:

THANKS for responding! My friend is coping with the minimum repayments but only just. The total he can afford to repay is £320, although if he gets anything extra he chucks it at the debt.

His credit rating is excellent, he has never missed a payment and he has everything up to date. He could apply for a 0% card but would there be much point when the aprs are all so low?

The APR's might seem low, but on the balances he has, it soon adds up, and means less money is going back at reducing the debt, but just at repaying interest - having a 0% card will definately make a difference!!

Your friend should concentrate on repaying more to the cards with the highest balance. Check out:

www.whatsthecost.co.uk

Ms_London xx

southernscouser

Jo4 wrote:

THANKS for responding! My friend is coping with the minimum repayments but only just. The total he can afford to repay is £320, although if he gets anything extra he chucks it at the debt.

His credit rating is excellent, he has never missed a payment and he has everything up to date. He could apply for a 0% card but would there be much point when the aprs are all so low?

Definately! £10 is better in his pocket than theirs!

If his credit record is excellent he maybe able to get a couple of cards and get it all on 0%! Use that snowball calculator to notice the difference then!

Jo4

Wouldn't he have to keep getting 0% cards every 6 - 9 months and then that would effect his credit rating??

mountainofdebt

Might be an idea for your friend, before he applies for a 0% card to lower his limits on his existing cards.....this could improve his chances as it means he has less available credit which if high enough can unnerve some lenders.

southernscouser

Jo4 wrote:

Wouldn't he have to keep getting 0% cards every 6 - 9 months and then that would effect his credit rating??

He would have to re-apply after the 0% period is up but as a general rule a couple of applications a month say every other month shouldn't affect your rating!

Plus he should close the cards with £0 balances so that will make him look more attractive to prospective buyers! Less potential debt and all that!

Jo4

mountainofdebt wrote:

Might be an idea for your friend, before he applies for a 0% card to lower his limits on his existing cards.....this could improve his chances as it means he has less available credit which if high enough can unnerve some lenders.

THANKS! Never thought of that!

Jo4

southernscouser wrote:

He would have to re-apply after the 0% period is up but as a general rule a couple of applications a month say every other month shouldn't affect your rating!

Plus he should close the cards with £0 balances so that will make him look more attractive to prospective buyers! Less potential debt and all that!

He had a card that had an available balance of £5,800 but he owed it nothing so I got him to cancel it at the weekend but I must get him to close the other one which has an available balance of about £3,500. Have been looking over the cards with him at the weekend, must look again.

southernscouser

Jo4 wrote:

He had a card that had an available balance of £5,800 but he owed it nothing so I got him to cancel it at the weekend but I must get him to close the other one which has an available balance of about £3,500. Have been looking over the cards with him at the weekend, must look again.

Make sure he asks for a letter of confimation that it's closed! Then give it a full month preferably 5 weeks then get him to get copys of his credit file from both Equifax and Experian! Then check that these accounts are closed!

It's important to get both coz they can hold different information! On my Experian one I had a financial association with an ex-girlfriend (which shouldn't have been on there) but it wasn't on the Equifax one and thats the only one I had ever got before!