Over draft & cc - debt building - help please

alandimi

had posted this in budgeting and bank accounts but have been told to post here instead:

Hi

I have a student overdraft with Lloyds TSB which is £1490 over drawn and has been for the last two years (I don't use it). It is currently a 'graduate account' and so has no interest being charged on it. However, come June they are going to be charging me 19%.

I also have a Lloyds TSB credit card which has £1266 on it which has an interest rate of 21%. It was a 0% when i got it ages ago but that's run out. I currently pay £35 per month but as the interest is so high I only manage to pay off £15 per month.

I am on Income Support as a single mother so money is tight. I have spoken to Lloyds and they have suggested consolidating both debts into a loan but want me to take out £2900 which includes the interest I will have to pay for the first year (I think?) which they say will cost me £43 per month for the next seven years. I think the rate was 9%.

Does anyone know if it is possible to pay off the overdraft using an established credit card and then move the debt from that credit card and my LLoyds TSB credit card to a new one with 0% interest. Obviously I can't get a new credit card as I am on benefits (or I would have already done it) but can someone else (e.g a parent) transfer my credit card debt to a card in their name?

any advice would be gratefully received. Thanks.

opinions4u

Guys, I know this one hasn't been here too long, but I'm just bumping it as I'm the one who suggested that the OP came here for help, as you guys are usually a supportive bunch.

I'd appreciate it if you could give her your best.

Thanks.

MoneyMummy_2

Hi, I will be interested in the reply to this. I have a similar armount overdraft with Abbey who have just offered me a credit card which I have declined. But I am now thinking, is it possible to pay off the o/d amount with the credit card (which is 0%) thus reducing the charges which could then go towards paying off the credit card?

Krisp_3

Hi there and welcome!

In answer to your question, I should imagine that in theory it would be possible to do as you suggest, but my concern is that as you are on Income Support, you might not get approved for another CC to allow you to obtain your 0% card.

I'm not an expert, and i'm sure others will be along to help - it's a bit quiet as it's bank holiday!

boredofbeingathome

alandimi wrote: »

had posted this in budgeting and bank accounts but have been told to post here instead:

Hi

I have a student overdraft with Lloyds TSB which is £1490 over drawn and has been for the last two years (I don't use it). It is currently a 'graduate account' and so has no interest being charged on it. However, come June they are going to be charging me 19%.

I also have a Lloyds TSB credit card which has £1266 on it which has an interest rate of 21%. It was a 0% when i got it ages ago but that's run out. I currently pay £35 per month but as the interest is so high I only manage to pay off £15 per month.

I am on Income Support as a single mother so money is tight. I have spoken to Lloyds and they have suggested consolidating both debts into a loan but want me to take out £2900 which includes the interest I will have to pay for the first year (I think?) which they say will cost me £43 per month for the next seven years. I think the rate was 9%.

Does anyone know if it is possible to pay off the overdraft using an established credit card and then move the debt from that credit card and my LLoyds TSB credit card to a new one with 0% interest. Obviously I can't get a new credit card as I am on benefits (or I would have already done it) but can someone else (e.g a parent) transfer my credit card debt to a card in their name?

any advice would be gratefully received. Thanks.

Hi and welcome to the boards.

My own personal thoughts on this-

I don't think they should be suggesting a consolidation loan to you, i am pretty sure this comes under the 'managed loan' category and you will end up paying far more, even though it is at 9%.

I also think that because you are on benefits, then it makes it worse that they have suggested this to you and they should be putting you in touch with one of the free debt charities. They are listed at the top of the boards. CCCS and Citizens advice are the most common ones.


Also - i have been in the position of putting someone else's debt in my name and not getting a penny back off them towards that debt. I am not suggesting that you would do that, just that with the best will in the world it is not always possible to pay back what you owe before the interest free time would run out- for example if your parent were to get an interest free card and transfer the balance- the time limit could be 15 months...the payments for that would be over £200 a month to clear it in that time- before interest begins to be added on- could you afford that?

I hope you don't sign for that loan- it won't be a quick fix solution as the only people who benefit will be the bank. You will take a long while to clear the debt. If you were to go on a debt management plan it would take you less time and you could well have a good change of circumstance and so be clear far more quickly than 7 years. It may affect your credit for a while- but it is better to live and know you can afford to rather than getting yourself further into debt by taking on this loan.

Hope that doesn't come across harshly. x