Pay off CC vs. Loan

GeCon

Hi there,

I am trying to pay off my GBP5,300 debt on CC. I applied for several CC to BT. Howeverm got declined (due to moving houses sveral times I think). I have now been accepted for a loan from my bank for GBP6,400 over 24 months at 14.9% APR (monthly payment of 307.15).

Do you think it is better to go for the loan to pay off the CC or should I just continue paying off GBP400 a month on the credit card (currently 1.385% per month on purchases).

I am looking forward to your feedback.

I just soooooooo want to clear this debt.

Thank you.

continualdiamond

If you go for the loan will you get rid of the credit card?

Only asking because my bf has a credit card. The balance was at £4500, he decided to get a loan and pay off the cc, buy a car and pay off a pc he had on credit. BUT he didn't get rid of the credit card and now the balance is at £5000.

He regrets obviously not getting rid of the card as now his debt is a lot higher.

GeCon

I would pay off the CC in full and lower my credit limit. Probably put the rest into a savings account.

grumbler

1.385% p.m. is 17.95% APR
See http://www.bankrate.com/brm/calc/MinPayment.asp (use 18% rate and £400 fixed payment). With your credit card It will take you 15 months tp pay off your debt. In that time, you will pay about £653 in interest. This is much less than the interest you will pay on the loan £307.15*24-£6400=£972.

I think it is better to keep the CC and pay £400 p.m. than to take this loan.