Advice on using a loan to get rid of all crdit cards

Rick_1138

Hi all,

I am looking for some views or recommendations about what i should do in my present situation.

I have accumulated some debt over the last few years, nothing major, about 7k.

i had got this down to about 4K, on a 0% balance credit card and was getting rid of it well, however there was an emergency last year and an unexpected trip that i had to pay for which added about 2.5K to my emergency credit card.

As a result i now have about 6.5k debt, all 0% but it means i am paying about £800 a month to get rid of it all before the 0% deals run out in October time.

I can afford these payments but it is the comfortable maximum i can afford after all payments and bills are squared a month, and tbh its going to become a problem if another emergency comes up as i was starting to develop my savings but it wiped it out last year and i am now paying off debt and having nothing to show for it.

My main thought was to take out a loan over 2 years for 6.5k, which would be about £280 a month for 24 months, which would get rid of all my debt (i have no other major outgoings a month bar this credit card and general bills, and a small loan that ends in 8 months i got when i was leaving uni)

This way, i am paying a lot less a month, not straining myslef, and getting rid of my debts in about the same kind of time frame, as i have things to pay for this year that will strain my ability to get rid of the credit card debt without starting to incur biggish interest hits.

I am basically curious if others have taken a loan to cover credit card debts, and if it worked out\didn't etc.

This way i can cut up my cards, have my main emergency card that has a small limit on it, and start putting cash away in savings, build up pension scheme etc etc. as just now i feel i am shoveling like mad just to stay at the same point in the pit.

yes its swapping one debt for another, but isn't it all about managing and what your comfortable with.

Any advice\experience welcome.

Thanks all

Rick:D

Typhoon2000

If you can afford the payments your are making at the moment (even if you are just managinging it) at 0% and will be debt free by October then you should continue to do just that and not take out an intrest bearing loan.

Any

???

So you would rather pay interest on the loan then pay off your debt within 0% period...

Interesting...

Most (all) people on here are trying to do the exact opposite...

Rick_1138

The 0% is very good, i am just worried that come october i may still have say 2K left to get rid off, and i could try for a final 0% card transfer to finish it off, but i was worried that i would be declined as the current financial markets may not want to give me a third card in 3 years.

I just don't want to become a bad credit rated person, i have never missed a payment on any loan or card, and always stayed in my limits etc.

I thought that you got a black mark if you get declined.

I agree that the 0% option is the best.

The other idea is to lower monthly payments by say £100 and see what i have left to pay by September and try for a new 0% card and transfer the balance to get rid of it all, it might just take an extra 3 months than i had planned.

My main worry was getting a bad credit rating.

Typhoon2000

There are no black marks for being declined. You credit report does not state if you application was successful or not. Anyway even you had 2K balance left when your 0% deal ends, it would be gone in no time at the rate your paying it off.

Rick_1138

My sums work out at having about 2.3k left in September, when my egg 0% ends, so i could either let it run into the 16.9% apr for a couple of months, be about £50 a month in interest for 3 months, or get a new 0% transfer for theat short period.

I think i was just getting a bit worried something might happen, and i could be shafted, at least with the 0% rates i can hold off payment bar the minimum if something happens as i wont get any interest.

hmm, thanks for letting me know about the lack of black marks etc, that was my main worry.

i shall sort it out on card swapping then, as it means i am paying off just what i owe.

CLAPTON

you have 6.5K of debt ay 0%
you are paying 800 per month
there are 8 months to go
that makes 6,400

seems very good to me

Any

Rick_1138 wrote: »

The 0% is very good, i am just worried that come october i may still have say 2K left to get rid off, and i could try for a final 0% card transfer to finish it off, but i was worried that i would be declined as the current financial markets may not want to give me a third card in 3 years.

I have currently 6 credit cards. Probably had 8 in the past three years.

Rick_1138 wrote: »

I just don't want to become a bad credit rated person, i have never missed a payment on any loan or card, and always stayed in my limits etc..

This is what decides whether to give you any other card or not. Sure, there are other issues such as having too much available credit or something like that, but the main issues are:
stability (ie long time at 1 address, long term job stability)
past credit history (ie how well you managed your debt in past

Rick_1138 wrote: »

I thought that you got a black mark if you get declined...

No

Rick_1138 wrote: »

I agree that the 0% option is the best.

If you could get a loan, chances are you can also get credit card

Rick_1138

Thanks all for the advice.

I shall sort it out and aim for £600 on the egg card a month till October as that gets rid of that, and £150 a month on the virgin leaving me about a grand to go when the 0% ends in december.

Wonder if setting up a direct debit would be an idea, keeps me right etc.

ste_coxy

Rick_1138 wrote: »

Thanks all for the advice.

I shall sort it out and aim for £600 on the egg card a month till October as that gets rid of that, and £150 a month on the virgin leaving me about a grand to go when the 0% ends in december.

Wonder if setting up a direct debit would be an idea, keeps me right etc.

set up a standing order - more flexible and you control it rather than the credit card company ;@)

good luck!

Any

ste_coxy wrote: »

set up a standing order - more flexible and you control it rather than the credit card company ;@)

good luck!

Hmmmm, I am not so sure. For example Barclaycard is known by changing statement and due dates and people with SO got caught few times... So just be carefull.