DILEMA! Credit Card Payments vs Loan

Queen.Bess

I have a real dilema at the moment, which was keeping me awake at 3.40 this morning! In fact I have lots of dilemas which I hope will be sorted very soon and I'll be back on here for more advice!

But this dilema is that I have lots of credit card debts and currently am only able to afford the minimum repayment on all of the them. But one card, my Halifax card is currently at £6,700 and the APR is a whopping 20.6%! So this month, out of a £140 repayment, £100 is on interest alone!

The dilema is that I've been offered a loan by Halifax at 6.9% and I'm very tempted. I don't think it's classed as a consolidation loan as it's only 1 card, the card isn't used (it's in my safe!) and on 'snowball' it would take me until 2013 to pay the card off, whereas if I took out the loan I could have it cleared by 2009.

Please help and advise as I know you can!

Kevicho

If you take the loan, then cancel the card

From a mathmatical point of view its the best move

Kevicho

Just one thing to consider, would you be able to keep up your other repayments, ie what is the difference between card payment and loan payment per month?

jitsuguy

Hi,

As Kevicho said, you need to consider if you can afford the loan. If the payment is greater than £140 per month you could be left struggling to make ends meet. But generally it sounds as if it is a good idea. It might also be worth finding out whether you can make overpayments on the loan.

Plus if you do get the loan CUT THE CARD UP!

Jitsuguy

lynzpower

is there no chance of negotiating the interest down on the card or transferring to a low LOB card ??

Queen.Bess

Thanks for your replies. I already had it planned to cut the card up and close the account, I know that keeping it would be bad, if I took the loan I'd probably cut the card up in the Halifax branch to make sure I did it!!

Alas, no chance of transferring a balance as I've been turned down for new credit cards recently and the other cards I have don't have enough room left to transfer money to! A mess I know, but things will start getting better soon (will explain to you all when it does start to get better!!)

I wouldn't struggle with repayments and I had it on my list of loan questions if I could pay more money if/when I had any.

Thanks again, but keep your thoughts coming!