Advice please :)

Teacher2012

Hello all,

I am new here - I have used the site before but never posted.

Between my husband and I, we have 3 credit cards which we owe money on. We have just bought our first house a month ago. My credit card is interest free until February 2013 and I have got it down from £2600 to £1350 since having it.

My husband's credit cards aren't interest free and he only pays the minimum payment.

He would like to transfer them over to a new interest free on balance transfers credit card but as we have only just moved, we don't want to apply for a new credit card and it be rejected.

So our options are:

a) Transfer the other two credit cards (totalling just under £1400 of money) to my credit card, which is 0% interest until July 2013 on money transferred before the end of August.

b) Continue to have 3 credit cards until he can apply for a new card in say 4/5 months? In the meantime, try to make higher payments on the credit cards, and potentially the one where we owe the least.

I should also add in that we are doing a lot of work to our house at the moment so each month we are spending quite a bit on the house, but we also want to clear our credit cards.

We have recently finished paying a loan which is nice, but are now making mortgage payments.

Any advice please?

Thank you,
Teacher2012

m0ns00n

If you can't get a balance transfer, you'll want to try and pay off the highest interest rate card first.

I'm not sure how much you're paying to your 0% card just now, but I'd recommend lowering that to the minimum payment amount. You should then use this extra money to make higher payments to the card with the highest interest rate.

The amount owed on the credit cards is somewhat irrelevant - it's the interest rate that matters. Although I suppose it is nice to have the satisfaction of clearing one completely, which would be easier to achieve with the lower amount.

Is it possible to delay your home improvements until you've cleared the CC debt? The home will always be there to be improved, and you'd be much better clearing the expensive debt first.

Teacher2012

m0ns00n wrote: »

If you can't get a balance transfer, you'll want to try and pay off the highest interest rate card first.

I'm not sure how much you're paying to your 0% card just now, but I'd recommend lowering that to the minimum payment amount. You should then use this extra money to make higher payments to the card with the highest interest rate.

Is it possible to delay your home improvements until you've cleared the CC debt? The home will always be there to be improved, and you'd be much better clearing the expensive debt first.

Thank you for your help.

The minimum payment on my 0% interest card is £25. Up until this month, I have paid off £100 every month, but I have lowered this to £50.

The home improvement could wait but every single corner of the house needs doing and we are also due to undergo some medical attention too, so I don't really want the two to tie in too much. We already have a lot of the stuff we need for decorating as I bought a lot of stuff in the sales and when special offers were on.

Do you not think we should transfer the two cards on to the 0% interest one?

CLAPTON

why not try for 0% BT card?
if you are turned down then so beit

in general pay as much as possible on the highest APR debt and just a little more than the minimum on the other debts (so your credit records don't show you pay just the minimum)

m0ns00n

If you can transfer the other two cards to your one, then that would seem like a good option. It would allow you to clear the balance more quickly as the interest would no longer be accumulating.

My advice was more along the lines of what to do if you're unable to do this.

Teacher2012

Thanks m0ns00n, I think that might be a good option and then we can pay £100 - £150 per month off and get it cleared quicker and with no interest.

CLAPTON - if we applied for a 0% interest credit card, would we not be rejected based on the fact we've only just bought our first property and only lived here a month?

Thank you both!

m0ns00n

Teacher2012 wrote: »

if we applied for a 0% interest credit card, would we not be rejected based on the fact we've only just bought our first property and only lived here a month?

You might be, you might not be. Getting rejected for one card isn't the end of the world, so you may as well try.

It would possibly only be an issue if you wanted to apply for another card in the next 3-6 months.

Teacher2012

m0ns00n wrote: »

You might be, you might not be. Getting rejected for one card isn't the end of the world, so you may as well try.

It would possibly only be an issue if you wanted to apply for another card in the next 3-6 months.

Right, OK, thank you. I'm just looking at our finances. My credit card is doing a 3.5% balance transfer deal which means the fee would be just under £50, so I think it'll be worthwhile transferring them all over to the one card and then making 1 larger payment on that per month, until it's no longer interest free and then transferring it over again. I'll need to apply for a new card in February as it stops being interest free then, so it's a good idea to get it all on one card now I think?

m0ns00n

Teacher2012 wrote: »

so it's a good idea to get it all on one card now I think?

Yeah, that's a good idea. Get it on the 0%, and it'll also be easier to track 1 card than 3!

Teacher2012

Thank you for your help!

bouncydog1

Why will you need to apply for a new card in February when yours is 0% until July 2013? If you can divide the amount by no of months to end of June 2013 and pay that each month then you are sure of paying it all off before 0% runs out. Hold off home improvements each month unless you have cash in excess of cc payment due.