Bank Loan V Credit Card

princessjane

Hi Ya everyone, I'm new and my hubby is overjoyed that I am finally trying to stop spending and want to pay off our debts.

Q... we have approx 11,000 + debt on overdrafts and credit cards(yes I know we need to find out exactly) and I think we should put all this together into a big lump and take out a loan and pay it back. At the moment we pay interest on the overdrafts but have 0% interest on credit cards until October 2009. Is it wise to have a loan instead with interest or continue with the cards?? My fear is that the debt keeps increasing with overdrafts and cards but a loan would keep it as it is.

Hope I have posted in the right place...????

MrMuttley

Dont worry you've found the right part of the board :cool:

As far as any 0% deals go you need to make minimum payments on those until the 0% runs out. An spare cash should go to reducing your overdraft and anything else you're paying interest on.

Once any 0% deals run out then pay off everything the bare minimum you can except the debt with the highest interest. once thats gone move to the next highest interest.

There is some arguement for getting a loan as long term you will pay less interest. However this has the potential to lead to bigger problems as you increase your debt by filling your credit cards back up again. Make sure you really can afford any repayments on the load before you take one out and then close your credit card accounts or at least leave the cards at home in a locked box and give someone else the key :D

Only you know whether you have the self discipline to not use your CCs once the loan transfers the debt.

HTH

MrM

MrMuttley

Oh and almost forgot. Welcome to DFW