Question from Serial Debtors Wife

johnbfan

Would it make sense for him to apply (in his name only) for a loan to pay off the two credit cards? He has about £6000 in total on them. I'm thinking it would be better to apply for this loan and have one direct debit per month over say five years at a lower rate of interest than the credit cards charge.

It would mean one lower payment for longer but the fear of not coping would not be so bad.

I got so upset last night I did something I would never have done in ordinary circumstances (I wrecked something very precious to him) and I think he realised he had gone to far. He handed over his cashpoint card without me even saying anything, just asked that I don't shred it. And has given me verbal permission to deal with everything but only using his name.

He was stunned when he saw what I did and said he had never seen me do anything like it before. He did not go off on one about it but just handed the card over - no recriminations from him at all.

Your thoughts please on getting the loan in his name

Crown

Hi JBF,

I personally do not think its a good idea to consolidate the CC debts into a loan UNLESS you are 100% sure that his spending habits are under control and you actually cancel the credit cards that are paid off. Otherwise you will fall into the consolidation trap that many of us have falling into over the years. (ie: Clear the debt and then run the cards up to the limit again over the months)

Also if you go down the loan route you have to remember that you are then stuck with the debt and normally you cannot make any overpayments if you did come into some money without being penalised for it.

southwester_2

Hi and welcome

I admitted to my wife last month about debt and it is quite natural to react in this way and mine is a lot bigger than that, and it will take time but he has probably been worried sick about and if he admitted it to you it was a big step.

Re the loan not sure, thats what I kept doing until it got out of hand.
Best way maybe to transfer to 0% balance and pay off as quick as you can, then once that runs out skip to another one.

Good luck

Storm

Consolidation is rarely recommended on here, but to be sure can you post a few more details like the apr on the credit cards & how much is being paid off each month please? A loan for around £6K isn't going to be at a particularly brilliant rate either I'm afraid, and as Crown pointed out, you often can't make overpayments either.

If his credit rating is OK he might be better off applying for a low LOB credit card instead (and cancelling the others) as this will give more flexibility over how much is paid each month.

You can put the figures into the snowball at https://www.whatsthecost.com to see how long it would take paying off a loan compared to the cards.

The most important thing though is whether the spending habits themselves have been addressed, as otherwise the cycle might begin again.

johnbfan

Thanks folks

Will leave things as they are for now and see how his habits go. He says he is sorry and has stopped but you never know - its the same old story for him.

As you said if you leave it as credit cards you can always make bigger payments when the cash is there.

Will take a look at whatsthecost today.

Once again - thanks