Credit Card Debt Consolidation?

mork85

Hi Guys and Gals, newish to the site and i'm after your wisdom, not teeth though. Anyway, i currently have a student overdraft with Natwest off £1800 which i'm paying a standing order of £120 a month, plus a £2000 loan with alliance and leicester which i pay £170 a month, however due to my income falling recently, i finding this cripples me every month.

Would i be better to get a %0 for 10-12 months credit card and pay them both off, and pay circa £200-250 a month instead?

Many Thanks

laura2481

mork85 wrote: »

Hi Guys and Gals, newish to the site and i'm after your wisdom, not teeth though. Anyway, i currently have a student overdraft with Natwest off £1800 which i'm paying a standing order of £120 a month, plus a £2000 loan with alliance and leicester which i pay £170 a month, however due to my income falling recently, i finding this cripples me every month.

Would i be better to get a %0 for 10-12 months credit card and pay them both off, and pay circa £200-250 a month instead?

Many Thanks

Are you sure you don't want wisdom teeth? Mine have been playing up recently and I could do with being rid of 'em! :rotfl:

Anyhoo- consolidation is not a great idea... usually leads to more debt in the long run. If you post up a statement of affairs (money in/money out/debts etc) using this SOA calculator then we can give you advice on how to save money and make the payments you are making more affordable, without having to add to your debt.

Good luck

laura2481

ps, also no guarantee that you will get the credit limit you need in order to move both balance. you may only get a limit of £2000 say which won't be enough,,,

Tixy

Hi Mork

Whether this is a good idea will depend on a few things
1) what the current interest rates are on these debts?
2) how much you can trust yourself not to run up new overdrafts or loans.
3) what your credit report, history, amount of current debt and amount of current credit available (these will impact on whether you would get a 0% card - and if it would be at a sufficent credit limit)
3) what you intend to do with the balance once the end of the interest free period is reached. If you balance transfer £3,800 (+ BT fee of say 3%) - total £3914. £250 repayments for 12months = £3000. So potentially £914 left to pay which could be at a much higher interest rate than your current loan. Of course the 914 is only if you pay £250, if you only pay £200 then the remainder would be considerably more.

(that said some offer 15months 0% which would get you a bit further but not clear it entirely)

If you do apply for a card you will need a 'super balance transfer card' to be able to transfer the money to you current account and then pay it off your loan. Make sure you apply for a card with this facility otherwise it will be useless to you.

mork85

Thanks Laura, i'm ok for wisdom teeth at the moment, although i can't rule out selling some organs, my own of course.
My ' take home' is around 800pcm, with 200 rent, 170 Alliance an Leicester and 120 natwest standing order, 30 phone, 20 gym, maybe one or two small withdrawls, and it doesnt leave me with a great deal to play with, as i'm sure you'll agree. I would consider the 0% card for one or the other debts, would that be better?
Thanks in advance

Tixy

If you are going to move just 1 debt then probably makes sense to be the one with the highest APR (although if your student APR is about to jump up then take that into account).

If you go for a 0% card be very rigid in paying off your intended monthly amount (if you get into the habit of just paying the minimums some months you could end up with a large balance at the end of the period).
Also never spend on a BT card as the way the payments are applied and the interest works means you'll pay interest until the whole balance is clear. And finally set up a DD to pay it as if you miss a payment or make it just 1 day late you can lose your 0% rate very easily.

BeautyandtheBeast_3

I assume you have decided to pay that set amount for repayment of the OD or did you agree that sum with the Bank - If its an amount that you decided you would commit yourself to then perhaps you can look at redcuing that figure for a period of time until you get back on your feet? xx

mork85

Cheers Tixy, do you happen to know what these card are, that you mention? save me trawling the site for hours, thanks

Tixy wrote: »

Hi Mork

Whether this is a good idea will depend on a few things
1) what the current interest rates are on these debts?
2) how much you can trust yourself not to run up new overdrafts or loans.
3) what your credit report, history, amount of current debt and amount of current credit available (these will impact on whether you would get a 0% card - and if it would be at a sufficent credit limit)
3) what you intend to do with the balance once the end of the interest free period is reached. If you balance transfer £3,800 (+ BT fee of say 3%) - total £3914. £250 repayments for 12months = £3000. So potentially £914 left to pay which could be at a much higher interest rate than your current loan. Of course the 914 is only if you pay £250, if you only pay £200 then the remainder would be considerably more.

(that said some offer 15months 0% which would get you a bit further but not clear it entirely)

If you do apply for a card you will need a 'super balance transfer card' to be able to transfer the money to you current account and then pay it off your loan. Make sure you apply for a card with this facility otherwise it will be useless to you.

Tixy

Yep - here is a list
http://www.stoozing.com/sbt.php

mork85

Yeah i agreed this amount, which broken down is £30 a week, i dont know what to be more concerned about the loan or overdraft? as of now anything over a £1000 is subject to interest, so i could in theory get one of these %0 cards and pay off the £800, thus avoiding interest? your thoughts as always are appreciated

Tixy

If you transfer part of your overdraft, say £800, then the bank may still expect the £120 plus you'll have to pay minimum on the CC, so you could be in a worse position financially per month, albeit a better interest cost position in the long run.

Rearding applying for credit - more than 3 credit applications in a 6month period can affect your credit report for up to 2years - so if you apply for a card and get turned down don't keep applying with lots of different lenders. If you do get refused ask them on what basis as they will often tell you (which is handy for next time)

I have been told virgin and tesco don't score particularly harshly for their 0% cards (but I don't know how true that is - and I was turned down by virgin)