Debt, oh the joy!

Mark_Ice

Hey people,

After seeing Mr Lewis on TM I finally made the move and signed up..... now im in the mood to save myself a few quid!

Looking around here my debt seems like small fry compared to some people. I owe £4651.50 £2750 is with Citi on a 5.9% for the life of the balance type promo, thats ok I can live with it, the remainding debt is shared between Egg, Cahoot, Littlewoods Index branded Barclaycard (24.9% APR ) which im not to proud about and Alliance and Leicester (overdraft) NOW, the 1 million doller question is who offers a better rate loan other that The AA @ 5.8% is it possible that can be beat or should I just off the whole lot over to The AA?

If it makes any difference im a home owner with a good credit rating, 3 late payments in 98 and 1 missed in 01 which im quite chuffed about! ;D

I know it may not seem a huge amount of money but I do @ times get really stressed about it, any advice out there.... please?

Milky_Mocha

I read on a website http://www.360finance.co.uk/11.html.

that northern rock are doing loans from 5.6% APR. However that article contradicts itself. It starts by stating that this applies to loans for amounts over £15,000 but at the bottom of the table it states that it applies to loans between £5,000 and £15,000

You might want to give them a call for clarification. However the application itself I believe needs to be done online to qualify for this rate

Robert_Sterling_3

Well spotted MM

Rafter

Mark,

Given the amount of debt you have,  a loan may not be the best plan.

You should use the tips in the money diet book to get your spend down and repay your debt,  starting with the one with the highest interest rate.  Probably your Barclaycard or your Index loan I would think.

Another option would be to call Citi and ask for a top up loan to enable you to repay all your cards.

Just make sure you tear them up afterwards or keep an emergency card (with a reasonable rate) and pay it off every month.

Good luck.

r.

Walletwatch

Have you applied for any card recently and been refused? If not, then it may be worthwhile trying one application for a 0% deal which will address the monthly interest outflow by reducing it to zero. Basically close all other loans / dues and consolidate them onto the 0% credit card.

You can then discipline yourself during the interest free period, making your minimum credit card payments, and saving up to make the full principal repayment in time for the end of the 0% int rate period.

Cards I'd suggest are egg or Mint.

Martinslovechild

It may be worth phoning your existing card companies, explaining that you are looking to transfer some balances and asking what, if any, offers they could offer you.  They may offer you 5.9%, 3.9% or even 0% for 6 months.

Then, BT the full amount from this card (let's call this card card #1) to one of your other cards.  Once it arrives at the other card, immediately, BT the full amount back to card #1.  Transfer your other balances to card #1 at this point.

Thus, you'll be left with all of your balances at a much lower rate of interest, and all on card #1.

Finally - do NOT be tempted to add any further spending to card #1.  This spending will be at the (much higher) interest rate for purchases.  Also, don't spend on the other cards either, or you're likely to quickly find yourself back in the situation that you're now trying to get out of.

About a month before the expiry of the BT deal on card #1, apply for another card offering 0% OR phone one of your other existing card companies up and ask them the same question that you originally asked card #1.  You never know - after 6 months of the card not being used, they may well be tempted to get your business back. Then, move the balance across to them.

Also - it's a good idea to retain the payment amounts that you are making presently (or increase if you can afford) - that way, you'll pay the debt off a lot quicker. Don't be tempted to pay just the 2% or 3% minimum payment each month. Try for between 5% and 10%.

Good Luck.

ffs

Finally - do NOT be tempted to add any further spending to card #1.  This spending will be at the (much higher) interest rate for purchases.  Also, don't spend on the other cards either, or you're likely to quickly find yourself back in the situation that you're now trying to get out of.

You shouldn't be surprised by the flood of special offers you get from credit cards where you have recently made use of very low interest lifetime balance transfers, because these will quickly negate the savings you have made.