Credit card advice needed

Lilith1980

Hi all

I have a credit card with Virgin on which I have roughly £8,600 and the APR is 34.9%. I pay £240 per month onto this (minimum payment is £220). I don't spend on the card unless I have to and if I do, I repay what I have spent the following month as I don't want the balance increasing.

I also have a loan with A&L which is £289 per month (APR is 7.9%) and ends in February 2012. So after this point I will have that as spare cash.

However, paying for the Virgin card is proving pretty tight each month what with other bills. My current account is with the Halifax and they accepted me for a loan a little while ago to pay off the Virgin card which I refused in the end as the APR was higher than my Virgin card and I would have ended paying so much more than the original loan.

I am just wondering now though, whether it would be worth getting a loan with them in the meantime, with a long term, to reduce my outgoings and then once my A&L loan finishes I can put this cash towards paying the loan off with a lump sum.

What do people think? I cannot get 0% deals, my credit rating must be pretty poor so I feel a bit stuck

Thanks

CannyJock

Lilith1980 wrote: »

Virgin £8,600 APR is 34.9%. I pay £240 per month onto this (minimum payment is £220).

I also have a loan with A&L which is £289 per month (APR is 7.9%) and ends in February 2012. So after this point I will have that as spare cash.

A loan at APR higher than 34.9%? :eek:

No point doing that, it might reduce your outgoing each month like most consolidation loans offer to do but you'll pay back a lot more in the long run. A&L loan APR isn't ridiculous, and with the Virgin card at 34.9% not worth touching.

If you were looking to transfer the Virgin balance, or part of the balance, to a LOB card, there's a full list of them here http://www.stoozing.com/lob.php. You sure the Virgin minimum payment isn't 1% of the balance? Possible problem with switching the balance is that your minimum payments may actually go up - you'll need to crunch some numbers on that one.

If Halifax would consider you for a loan, they wouldn't consider you for a card to clear the balance? Halifax Easy Rate has 1% min payment, APR is only 8.9% and no balance transfer fee.

The other trick that you can do when battling with high interest cards is to pay almost your full wage to the card, but actually use it for all your normal spending. You'll shave some interest off the card doing this because the interest is calculated daily - but obviously you need to be careful when you spend on the card.

EDIT: With Virgin will take you 95 months to clear the debt, with Halifax Easy Rate would take you 42 months. If you pay the £289 to the card from Feb 2012 onwards, Virgin will take you 43 months, Halifax would be 32 months - so any way you cut it you're in for the long haul on this one.

stephane_2

Taking a loan to repay credit card debt is never a great solution, what is going to stop you using your credit card again in the future and then you're back to square one. Do you not have any other CC with a lower rate to which you could transfer some of your Virgin balance onto it? have you spoken to virgin to see if they would lower the interest (nothing to loose).

izools

How long ago did they increase the APR to 34.9%?

Did they provide you with formal written notice atleast 30 days prior to the APR increasing to 34.9%? (An Opt-Out letter)

Lilith1980

Hi, thanks for your replies.

Cannyjock - might be worth me investigating the Easy rate card, thanks.

Stephane - I will ring Virgin now about lowering the rate, see what they say. EDIT: No they can't lower the rate.

Izools - they did send me a letter but I was a bit hasty and all I saw was the rate rise and didn't read further. Didn't realise I could freeze the rate

izools

Lilith1980 - it might be worth a bit of bluff with Virgin.

Call them back, claim that you never received an "Opt Out" letter from them and don't feel they fulfilled their obligations of giving you fair, easy to understand notice about the APR increase, and as such you request they close the account, re-instate the prior APR, and if the don't, you want confirmation that they are refusing to do so in writing so that you can go to the FOS (Financial Ombudsman).

As I say, bluff, but be stern and you could very well get away with it

"But we sent out the letter on xxx"... "Well, I never received it, and that's what counts..."