:( Credit card debt problems - need advice!!

desperadoV2

Dear all,

I have huge credit card debt problems and I'm losing sleep because of it. I need some advice. I never miss a minimum payment though. All minimum payments paid via direct debit.

I have following credit cards:

CC1 - £4,500 Balance (£5,500 credit limit) - Paying Interest £65
CC2 - £1,500 Balance (£2,500 credit limit) - Paying Interest £25
CC3 - £2,800 Balance (£2,900 credit limit) - 0% Interest until Jan 07
CC4 - £510 Balance (£8,000 credit limit) - Paying Interest £10
CC5 - £100 Balance (£6,500 credit limit) - Paying Interest £5
CC6 - £0.10 CR Balance (£8,100 credit limit)
CC7 - £40 CR Balance (£3,500 credit limit)

I need advise on the following:

1. I'm planning to apply for a mortgage (first-time buyer). I have got 5% deposit sorted out. Will my credit card balance affect my mortgage approval process?

2. I already have got 7 credit cards, can I apply for another credit card and transfer onto 0% balance for next 6 months? Will it affect my credit scoring and mortgage approval process?

3. Can I cancel the credit cards which I'm not using anymore? Will it help improve my credit scoring and eventually help me get a mortgage?

4. I have a total of £10,000 outstanding on credit cards BUT I have managed to raise £5,000 (raised by working overtime, sold few valuables and part-time job). Also managed to raise 5% deposit for mortgage. Should I pay off £5,000 in credit cards or should I put my 5% planned mortgage deposit amount and £5,000 into saving account for 6 months and pay one fixed monthly amount to credit cards and put off my mortgage plans for 6 months?

any advice? Please let me know.

many thanks.

jonesMUFCforever

Yes your outstanding debts will count against you.
Most mortgage applications will ask for details of other liabilities (they will be able to see them anyway when they undertake credit searches).
Why not clear as much of your cards now whilst you have the money before taking on the biggest cost in your lifetime?

in*the*red_6

Hi there and welcome,

Post this thread again on the debt-free wannabe board, you'll get lots of help over there

http://forums.moneysavingexpert.com/forumdisplay.html?f=76

Verbatim

Hi,

I'd second the last post.

Also as you're paying interest on some of your cards it makes no sense to have savings unless the interest earned on them is more than the interest you're paying out. If you are in the fortunate position to be able to repay your debts it would be better to do so and then save the deposit. You would then be in a stronger position credit scoring wise and would have better value mortgage deals available to you. If you're seen as laden with debt you will be scored as a higher risk and may not be able to access the best (cheapest) deals.