Credit Card Problem

columbo1977

Hi All

I was thinking of getting a consolidation loan to pay off 2 credit cards as the minimum payments are now at £180 (for both) I usually pay off £400 a month but still end up using the cards.

I was going to get a loan so that I can see an end and so that I don't have to rely on using them.

A friend told me to come to Martins Site and there were letters there to send to the Credit Card companies to freeze the interest and pay off the cards (destroying them of course) but I cannot see where to go or what to do as I'm not technically in Debt crisis, as I am paying more than the minimum amount, I just want to get rid of them and pay them off.

Any advice?

Columbo1977

bottleofred

Hi Columbo and welcome to the forum,

I would strongly advise against getting a consolidation loan to clear the cards, as consolidation only works for around 10% of people who try it and I wasn't one of them. You should post your statement of affairs http://www.makesenseofcards.com/soacalc.html to get advice on how you can save extra cash to pay off the cards quicker.

Clarie_2

Hi columbo 1977,
I'm with bottleofred - consolidation loans don't solve the problem of you ending up using your credit cards.
You say you are paying over the minimum payment (which shows you have some spare cash each month) but you still end up using the cards. Maybe the answer is to get the balance on to the lowest apr possible, and then cut them up? (figuratively or literally)
(check out the site for cards with the best transfer rates, or if you have a poor credit rating, how to credit card shuffle)

Clarie

columbo1977

I cannot get anymore cards (to balance transfer) as I have too much debt.

It was suggested to me to contact the two credit card companies and ask them to destroy the cards and freeze the interest so I can get them paid off?

Tixy

Hi columbo
Its likely that the credit card companies will only agree to freeze interest if you can demonstrate you cannot afford the minimum monthly payments each month. As you can and do pay more than that then they won't be able to help you.

What you need to work out is if you didn't re-use the cards each month could you afford to pay your minimums. To do this then I would say you need to complete a statement of affairs as red suggests to work out your full monthly budget (remembering to put in amounts for things you don't pay each month -such as 1/12 of your car tax bill etc).

If you cannot meet your repayments then you could consider asking them to freeze interest and closing your accounts but need to be aware that if you do this they will default you and will mean you will struggle to get new credit for the next 6years.

Also if you have other debts as well as the credit cards you will be expected to treat them all the same and ask them to accept reduced payments and freeze interest.

columbo1977

After reading the posts here I was looking at the balance transfers, I applied for the Barclaycard one and have been accepted.

0% for 17months, that should enable me to pay off a massive chunk of the debt before interest starts.

I was rather surprised?

Tixy

Thats great news. Have they told you your limit yet? will you be able to move all your debt across?

If you cannot move it all to interest free and you have to leave some on one of the old accounts then just pay the minimum of the 0% card and the max you can afford each month off the other account to minimise the interest you will pay. You could also look at the snowball calc to work out how long it might take you to clear all your debts etc.

columbo1977

No, I don't know limit. I asked for 5k, so I could pay off both of my other cards.

Hope fully it will cover that but if not I will transfer the one with the high interest rate.

MFWannabe

When i applied for my Barclaycard i received an e-mail within a couple of days stating what my credit limit would be.
Remember you need to pay minimums on the other cards if they become due while the transfers are going through. Also remember once the other cards are cleared to close the accounts and cut up the cards; you really need to stop spending on the cards

columbo1977

FREEZ wrote: »

When i applied for my Barclaycard i received an e-mail within a couple of days stating what my credit limit would be.
Remember you need to pay minimums on the other cards if they become due while the transfers are going through. Also remember once the other cards are cleared to close the accounts and cut up the cards; you really need to stop spending on the cards

Spoke to Barclaycard today, the limit is enough to clear them. Job one, once the transfer has gone through is to cut them into little pieces :P

Thanks for all the advice