Should I get a Low Rate Loan or Keep Swapping Credit Cards?

horsechick

Dear all,

I am trying to work out what to do with my finances and am weighing up the options of:

a) Getting a low rate loan (5.9%) for say 5 years so that I can start at zero and work upwards; or
b) Continuing to shift my money between credit cards

I find it difficult to juggle my finances when I am working in negative figures.

Graduate Account -1900 (interest bearing over £1000 - I pay about £11 interest per month)
A&L Premier Account -900 (interest bearing)
HSBC Gold Card -300 (interest bearing)
Post Office Credit Card -800 (0% until February)
Harley Davidson Credit Card -5800 (0% until May - I think)
3 outstanding loan payments 3x442 = -1326
TOTAL = -11,026

This has been a combination of being a student, poor budgeting which is now much improved. In March 05 I took out a loan of £10000 over 2 years to buy a car and although I have never missed a payment, if I hadnt taken out the loan I wouldnt be in such a pickle.

My net income is £1400 per month and my outgoings are:

Rent £368 including utilities
Mobile £35 (500min and unlimited texts - I dont have a landline)
Broadband £5
Loan Repayments £442
Minimum credit card repayments around £140
Train travel to work £65

When the loan finishes I could use the £442 per month that was spent on the loan to pay off the overdraft/credit cards (thus continuing to pay off £582 of my debt per month). I am probably going to sell the car but that wont happen until sometime in the spring.

Based on not selling the car it would take 19 months (11026/582) to pay this off (ie July 08). Selling the car would also help by reducing my debt by around £5000.

If I sold the car I think I could be debt free in 11 months ((11026-5000)/582) ie by November 2007.

I am really concerned that if rates go up and I cant get the 0% deals that I will get into difficulty paying off the credit cards.

Any thoughts on this - any advice is gratefully received.

lynzpower

hi there
most of your debt is interest free so I cant see the point in racking them into an interest bearing loan.

Being over the long term youll be in debt for longer, costing you more.

Could you do a full SOA and we can take it from there

ricksExpensive

Welcome to the boards.

First step is not to stress as Lynz says you have interst free on most of your debt so that isnt as bad as it seems!

An SoA will help everyone on the board help you and give you more advice, this may take time but will be worth it