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Pay off the credit card or increase my loan?
HappyDaze_3
Posts: 24 Forumite
in Credit cards
Hello, not sure if this fits into the loan or credit card category so apologies...
I have a Halifax credit card which I've maxed out (£7000). I recently received a letter from them saying they were going to increase the interest rates but I have the option to cancel the card and continue to pay off the balance at the existing rate. I also have a loan with them which I will finish paying in February 2012. This is an unsecured loan with a fixed rate of £247 per month.
When I called the bank to tell them to close the credit card account (I want rid of it) they asked if I had considered increasing my loan to pay the credit card off because I would be better off financially – in that my monthly payments might increase but the credit card would be cleared earlier.
My instinct is to decline their ‘kind’ offer and just pay off as much of the credit card per month as I can to get rid of it, then when I have finished paying off the loan put this towards payments. I really don’t want to have to take out another loan to pay this off but the thought of clearing it sooner is very appealing.
I have acknowledged I am in this for the long haul (as my signature will testify!) so prepared to keep plugging away.
Any advice would be greatly appreciated, thank you.
I have a Halifax credit card which I've maxed out (£7000). I recently received a letter from them saying they were going to increase the interest rates but I have the option to cancel the card and continue to pay off the balance at the existing rate. I also have a loan with them which I will finish paying in February 2012. This is an unsecured loan with a fixed rate of £247 per month.
When I called the bank to tell them to close the credit card account (I want rid of it) they asked if I had considered increasing my loan to pay the credit card off because I would be better off financially – in that my monthly payments might increase but the credit card would be cleared earlier.
My instinct is to decline their ‘kind’ offer and just pay off as much of the credit card per month as I can to get rid of it, then when I have finished paying off the loan put this towards payments. I really don’t want to have to take out another loan to pay this off but the thought of clearing it sooner is very appealing.
I have acknowledged I am in this for the long haul (as my signature will testify!) so prepared to keep plugging away.
Any advice would be greatly appreciated, thank you.
Debt at January 2011:
Bank loan: £2973.12; MBNA £437.41 ; Bank CC; £7000; Nat West CC £3554.41 Mint CC £4652.01 Next £333.39; Post Office £4532
Slow and steady wins the race...
Bank loan: £2973.12; MBNA £437.41 ; Bank CC; £7000; Nat West CC £3554.41 Mint CC £4652.01 Next £333.39; Post Office £4532
Slow and steady wins the race...
0
Comments
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What are the current rates of your card and loan?0
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The credit card is currently 21.95% (purchases) and 26.93% (cash advances - which I have used it a lot for). I took out my current loan in 2007 and I think the rate was about 7%. I'm not sure if they would increase my current loan at the old rate or start again at the new rate of 9.9%. I've not gone into detail with them as yet - I wanted to weigh up my options and get advice before I agreed to anything new.Debt at January 2011:
Bank loan: £2973.12; MBNA £437.41 ; Bank CC; £7000; Nat West CC £3554.41 Mint CC £4652.01 Next £333.39; Post Office £4532
Slow and steady wins the race...0 -
Sounds like it would be well worth considering increasing the loan, even at 9.9%.0
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Firstly you need to find out what rate they would give you for the loan.
And I think it is not rocket science to see that 9.9 % apr is lower then 26.9% apr...0 -
Thanks so much - I'll give them a call back and see what they can offer me and go from there.Debt at January 2011:
Bank loan: £2973.12; MBNA £437.41 ; Bank CC; £7000; Nat West CC £3554.41 Mint CC £4652.01 Next £333.39; Post Office £4532
Slow and steady wins the race...0
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