Use my Credit Card or Loan

darren_5

Hi guys,

I got a credit card with £800 on and a graduate loan of approx 4k.

My credit card is 0% for 14 months and has a credit limit of £2000 - Is it worth me transferring some of my graduate loan balance to my credit card as its interest free. I pay around £100 a month on my loan and this is a fixed amount every month.

Or.... Is it worth me clearing my credit card and then concentrating on clearing my student loan?

Finally, we are looking to get a mortgage in the next 12 months. What do lenders look down on more, loans or credit cards?

Thanks.
Darren

Deru

Always tackle the most expensive debt first.

Can you actually transfer the loan to the 0% card? Can you pay by card? If so, I think it's worth it even if there's a surcharge for paying by card.

Student Loan is the cheapest loan you can get so leave it until most expensive debt is sorted (and it gets paid out of your pay packet anyway?)

I reckon they look at both but credit cards would be worse but if you have too many of either, then it looks worse. However, if you have a few of each and they're all managed well and they're all up to date with no or few missed payments, then it's more beneficial than not having any cards/loans. Student Loan doesn't count though as it doesn't actually show in my credit report.

darren_5

Deru wrote: »

Always tackle the most expensive debt first.

Can you actually transfer the loan to the 0% card? Can you pay by card? If so, I think it's worth it even if there's a surcharge for paying by card.

Student Loan is the cheapest loan you can get so leave it until most expensive debt is sorted (and it gets paid out of your pay packet anyway?)

I reckon they look at both but credit cards would be worse but if you have too many of either, then it looks worse. However, if you have a few of each and they're all managed well and they're all up to date with no or few missed payments, then it's more beneficial than not having any cards/loans. Student Loan doesn't count though as it doesn't actually show in my credit report.

Hi, when i say graduate loan i mean one through the bank that you can have as a graduate...

Deru

Yeah, I know. Seems expensive that's why I recommend trying to clear that but I don't know how you would transfer a loan to a 0% card. I don't think that's possible in most circumstances. If it's possible, do it.

I thought you were saying you had a Student Loan as well when you said to pay that, or did that refer to the grad loan?

If your credit card is 0%, don't clear it yet but put the money aside. Save £800 over the 13 months in an easy access savings whilst paying the minimum until and then clear it at the end, whilst tackling the loan. You'll need it then unless you're planning on transferring again but might not be successful so I'd be weary.

It all depends on your income / outgoings though.