Reducing interest/Debt

carleyp

Hi
I have a credit card which i owe about £1500 (Halifax)
I also have a Loan which i owe about £3900 (Llyods)
I am paying interest on the credit card so my monthly payments arent really doing anything to the main balance!
I want to try and amalgamate my debt (above) to one payment with one company!
Would the best way to do this be to get a credit card which is interest free on balance transfers for a set period of time, and pay this off each month then when the interest free period runs out get another credit card and repeat the process?!

Any help would be appreciated


Regards

bottleofred

Hi Carleyp,

A 12 month interest free credit card will only help if you can clear the entire balance over the 12 months or whatever period the credit card company set as interest free. You could try switching once the interest free period ends, but you'll have to have a good (or acceptable to the company your applying to) credit rating to be able to do this. This may be beneficial for the halifax credit card you already have, but I'm not sure you'll be able to put the loan onto the credit card although you could try. Even if your only able to transfer the balance of the halifax credit card onto an interest free card though, it will still save you a lot of money in interest payments.

I hope this helps

Bottle of Red

DarkConvict

Whatever you do don't go for consolidation loans.

If you can get a 0% deal, then you could do it for the credit card. And this is the way many people who can get a 0% card can do it, but these are not easy to come by in the current financial climate. Some people who have done it for years have found the last 12 months unable to get such deals and got stuck with high APRs and debts they couldn't afford.

The loan is however more tricky, as you may not be allowed to transfer it at 0% (unless you use a super balance transfer card (Virgin/MBNA)), even then loans do often have early repayment penilities.

Try the cut existing debt costs guides - http://www.moneysavingexpert.com/cards/

carleyp

Thanks everyone