Taken loan to pay of credit cards

ugs831

Hi,have been paying out about £400 a month on credit cards and about £370 of it is interest. have three cards and also have an existing business loan to pay off. Have borrowed £23000 at a reasonable rate(8.9%) and this will just about pay off these debts. Have contacted Virgin to see if they would accept less than the outstanding debt. They say that if i offer them at least 95% of the debt they will accept this and close the account without it affecting my credit score.Is this a good idea and does anyone know the pros or cons of doing this or any other ways that i could save on these payments as i have urgent works required on my house and have virtually no free capital. Am hoping to get the business loan down as i believe i was mis-sold payment protection. Obviously i just want to try to save myself some money,does anyone know the least i could offer and it not affect my credit rating. thanks for any replies.

thriftymomma

As long as you get the offer in writing, then I see no problems with this.

Numpty_Monkey

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mufc689908

MBNA nearly doubled the apr on my cc without justification last year to 34%, I dug my heels in and didnt pay a penny for 6 months to them after being told the "Card was variable and we can charge what we like" blah blah.

This morning they came up with an early settlement figure of 30% of the card balance payable in the next 60 days.

Moggles_2

mufc689908 wrote: »

MBNA nearly doubled the apr on my cc without justification last year to 34%. I dug my heels in and didn't pay a penny for 6 months to them after being told the "card was variable and we can charge what we like" blah blah. This morning they came up with an early settlement figure of 30% of the card balance payable in the next 60 days.

Just as long as you're aware of the implications. So many post here blaming their card provider for not warning them of the consequences.

This is no soft option. It will be marked as "arrangement to pay" on your credit file, which makes it all but impossible to obtain credit for six years.

Six years is a long time to manage without credit facilities, IMO.

Moggles_2

Does anyone know the pros and cons of doing this or any other ways that I could save on these payments?

Have you tried asking each of your three credit card providers to lower the interest rate(s)? (You can do this over the phone.) You may be able to reduce your costs considerably. For more suggestions, see Martin's *Credit Card Shuffle*article

http://www.moneysavingexpert.com/car...-card-interest

As above, if you decide to accept the terms of MBNA's offer, it's crucially important to get confirmation in writing that your credit rating will not be affected.

Moggles_2

Does anyone know the least I could offer and it not affect my credit rating?

Sorry, lenders do not disclose the criteria they use to decide. Perhaps, because to do this would only encourage customers to be economical with the truth.