Best way out of Credit card debt

gezzza

so Ive managed to run up a £9.5K debt on 3 cards:eek: whoops
Ive gone through my finances and i have £400 a month to pay off this debt, Ive also cut the cards up.

i have

£2932 on an egg card @ 16.9%apr
£1726 on an AA card @ 17.9% apr i think
£4922 on a barclaycard @ 0% for 11 months then to 16.9%apr

I have £2.5k coming to me over the next 3 months which will go towards the debt.

The AA have just raised my limit to £8.5K and offered a 3.94% balance transfer for the life of the balance with a 3% fee.

Whats the best way for me to clear the debt?

I have £7.5K in shares through my company but i can't cash them in with out paying 40% tax on them. worth cashing them in?

cheers

Gary

Simon_Preston

What's your limit on the other cards, you will be better off balance transfering your AA balance to another card to get it to 0 then transferring it all over to take advantage of their offer. Else you'll be paying 17.9 on the existing debt with the lob only taking effect in the transferred debt.

talana

Ive gone through my finances and i have £400 a month to pay off this debt, Ive also cut the cards up.

Can we get the full picture to start with? That £400 is I assume in addition to the minimum monthly payments on each card. How much are the min payments?
Let's work out how long it'll take you to become debt-free if you stick with the current situation. Then you'll have a handle on what effect your extra £2.5k and other changes will have.

loserooi

I usually use debit card,the alternative payment method to cash when making purchases

jauntyangle

What's the Credit Limit on your Barclaycard? Can you transfer a balance from your AA Card or Egg card to it at 0%?

If not, look for a card (or cards) that offers 0% on balance transfers, preferably for 12 months or more.

Transfer as much as you can off the AA Card and the Egg card to this new card.

Always pay the minimum balances.

If you still have significant debt at the expiry of the 0% offer, then start the cycle over again by applying for another 0% card.

Close down your Egg/AA Cards completely, unless there is some other benefit you're getting from them.

jd87

The AA's "generous" offer is useless to you. They are just hoping you will use it and lock in your £1700 at high interest for many years to come.

If you have a good credit history try applying for one of the top 0% (Virgin, etc) cards and transfer your egg and AA balances to that.

Grade_A_Reject

Why can't you cash the shares? I thought shares came under capital gains tax not income and you're well under the CGT threshold.

Worth asking on the "cutting tax" board.


[edit]
http://www.fairinvestment.co.uk/capital_gains_tax_on_shares.aspx

Only income over the £9200 annual exemption amount would be liable for tax at 40%. So, cash the shares, and with the £2500 you also said you had coming you could easily clear all three cards with cash left over.

Simon_Preston

Simon_Preston wrote: »

What's your limit on the other cards, you will be better off balance transfering your AA balance to another card to get it to 0 then transferring it all over to take advantage of their offer. Else you'll be paying 17.9 on the existing debt with the lob only taking effect in the transferred debt.

I may have been slightly drunk when I wrote that and didn't read the whole thing through.
I'm guessing you've just opened the Barclaycard and have maxed out its limit on a BT?
Anyways, If you have the available credit on your egg card then it'd make sense to transfer over the AA card balance to that then transfer it all back to the AA card so you get the better deal. If you don't have the limit to do this then you could use that 2.5k you are getting to pay off the AA card then move over the Egg balance. Leave the Barclaycard one as it is.

never-in-doubt

Simon_Preston wrote: »

I may have been slightly drunk when I wrote that and didn't read the whole thing through.

LOL, now that's being honest mate :beer: :beer: :beer: