Best way forward?

misscharlie

I want to repay my credit cards debt off, but have no idea whats the best way to go about it. I've read a few of the articles on here and got a loan rate from moneysupermarket for Zopa 7.9 with 9/10 likeness or the sllightly higher with ratesetter.

I owe 8k to halifax one card with a rate of 23.9%
And 4k with monthly interst rate of 1.3% with tesco bank.

I havent checked my credit file, but havent missed any payments. I am a home owner.

I'm looking to make a repayment of 750 monthly.

Thanks x

Crunchy_Nutter

1.3% monthly rate is equivalent to 16.7% APR (http://www.stoozing.com/mon2yr.htm), so your Tesco account is a cheaper than the Halifax - so aim to prioritise paying Halifax - throw any extra cash their way, and it will cost you less in interest over time.

Marco_Panettone

What limits do you have on the cards? If there's space on the Tesco card it'll be cheaper to move more debt onto that before hammering the Halifax one.

Set up a direct debit for the minimum payment for both cards, and also a standing order to come out on payday. This means you never miss a payment, but keep control of how much you pay off.

Tixy

If you keep the debts as you have them now and pay off £750 each month (paying off halifax first) then it would take you 18.5months to pay them off, and you'll pay £1830 in interest.

What loan term were you looking at with zopa?

One warning note with consolidation loans is that people often run up the card debts again on top of the loan and end up in more debt (of course everyone thinks they won't do this and start out with the best of intentions but its very easy to slip back into using them again). If you do go the consolidation route then cut up all your cards and close your accounts so you won't be tempted to re-use.

The other issue with consolidation loans is often people find it hard to be accepted for them, as potential lenders will view it as additional debt on top of your existing debts (as you might not use it for consolidation) and so will conisder if you can afford to service £24k on your income before making a decision whether or not to accept you.

misscharlie

Thanks for advice.

The zopa is for 3 years with a payment that was very under my budget I think around £380.

Both cards are now close to limited as I've just purchased new stock for a new business venture. (this is a side line to my main job)

My earning is 36k plus bonus. Does this work in affordability?

Cutting both cards would be a very sensible option. Both are already set on minimum payment but I usally just spread out my monthly payments, but on checking the halifax rate this morning, I soon now ralise that this is the one to be tackled first. As in the last 1 month i've taken the card to almost limited I'm worried this would negative effect applying for a loan or 0% deal and that I get rejected. For this readon I wasn''t sure to just carry on making the extra payment to halifax, or try and switch to a card 0% or a loan.

Thanks again x

misscharlie

sorry just bumping for advice xx

MFWannabe

Best option would be to see if you can get a new 0% interest card to move the high interest debt to. You already have a Barclaycard so your next best option would be to apply for a virgin card. Look in the cards/ Loans thread at the top of the page on this site