Loan or keep going

saffronflowers

Right here is the situation:

Egg credit card - 4300 21.7% - paying £150 per month can increase to £200
It will take you 40 months to pay off these debts if you snowball correctly. During that time, you'll pay £1,667.00 in interest.

Barclaycard - £420.00 paying 24.9% paying at £50 a month
It will take you 10 months to pay off these debts if you snowball correctly. During that time, you'll pay £36.00 in interest

or get a loan

Egg loan for £5000 and pay back at £150
It will take you 37 months to pay off these debts if you snowball correctly. During that time, you'll pay £533.00 in interest

Thoughts please

SFx

medman

Hi Saffron

A loan is not usually a great idea as people tend to continue to use their cards and end up back where they started but with the additional debt burden of the loan. So it's only a good idea if you cut up the cards and stay within budget, which is a matter of self discipline!

I would phone egg and tell them you are intending to transfer the balance to another card as the interest rate is too high. They might offer you a 0% period or a low life of balance rate. Do the same with Barclaycard and see what they say. Don't apply for another card but get the details of some 0% offers to threaten them with.

Then batten down the hatches: minimise your spending and maximise your income and throw all available money at the highest rated card. You'll be surprised just how fast they come down.

Good luck and best wishes

MM

saffronflowers

They are my husbands CC - so they will be placed firmly in my wallet!!! He does though need a CC for work for his expenses, and we want to buy a new sofa, in the new year and it is safer to put it on a cc (I have the money saved already, so it will be paid off instantly)

SFx

LandyAndy

saffronflowers wrote: »

He does though need a CC for work for his expenses

SFx

Just a comment, not saying it applies to you.

This is a classic way of building up a cc debt. Pay your exes on a card then claim them back in cash and fritter it away or get it paid into your bank and lost in with the rest of your money.

Try and use one card for just reclaimable exes and make sure you pay it each month or pay your exes with a debit card ( if you can cover the cost until they are paid back to you).

saffronflowers

I am debt free and have been for nearly 4 years, most people laugh as I am the budget queen and can pretty much tell you the price of every item I purchase at Tesco!! (sad but true) From what I can work out is that we will save over £600 and pay them off at about the same time as we would paying them to the CC companies

sanfrancisco

Why don't you try to get a life of balance credit card, as opposed to a loan?

saffronflowers

SanF - that is an idea - what sort of rate would they do and why would that be more advantageous than a loan?

SFx

Crown

Hi Saffron,

I think that as you seem to have gotten control of your spending and budget for everything if you can save £600 then go for it! I would make sure that you really do stick to your budget though and do not give in to temptation.

I also agree with Francisco that if you can get a 0% deals you may be able to save more. have you considered this option?

Crown

saffronflowers wrote: »

SanF - that is an idea - what sort of rate would they do and why would that be more advantageous than a loan?

SFx

Sorry crossed posts.

THe advantage would be that you would not be tied into the loan and could repay the amount if you come into money fromn somehwere. Also of course its 0% for possibly 9 months and of course you can always try to get another deal once the current one ends.

You would need to take into consideration the balance transfer fee's though if doing this and check the T&Cs to make sure there isnt a catch

LandyAndy

saffronflowers wrote: »

SanF - that is an idea - what sort of rate would they do and why would that be more advantageous than a loan?

SFx

Life of balance cards start at about 3.9% I think. Advantage is your repayments are more flexible. Disadvantages You may be tempted to stretch the repayment term out further and you have another card to spend on (so cut it up as soon as you get it)

saffronflowers

LA and Crown thanks for that - actually got the calculator out rather than my head and worked out we would save £1100, a not insubstantial sum, if we go with egg there is no penalty for paying it off early.

Well this does actually depend on whether they will give Mr SF a loan, they have already offered him one!

SFx