Best chance of being accepted for a loan...

poppasmurf_bewdley

debtcutter wrote: »

Do you mean start by paying off the card with the highest interest rate?

Agree with most of the rest of your post though

No, I meant that he should reduce temptation by getting rid of as many of his credit cards as he can as quickly as possible.

However, the OP has since stated that he has cut all his CC's up. But that is not as good as cancelling them, as he could always be tempted to order new ones.

jeojadi

The cards are all maxed, the balances are the minimum amount away from the credit limit.

I've not explained this brilliantly tbf.

StuC75

Always go by the Rates being charged, not the balances - since the total debt would still be the same, but the interest charged whilst servicing those would be reduced - saving more in the long run.. is the Only sensible thing to do.

Having the cards still 'open' is also sensible in that the OP would also be minimising his credit utilisation which is often considered.. e.g. 7.9k of 8.0k utilised appears worse than 7.9k of 9.0k utilised - it 'appears' more in control rather than 'maxed' out.

Most card providers also flag if only minimum payments are made - so even paying £1 above each of these can also give a better 'influence' to what is reported on.

gb12345

jeojadi wrote: »

The cards are all maxed, the balances are the minimum amount away from the credit limit.

I've not explained this brilliantly tbf.

In which case, you would probably be needing to earn over £32k to get past first base with a lender and even then would probably be declined for your poor credit history.

As others have said, your best bet is to reduce your outgoings as much as you can and then snowball the cards to pay them off as quickly as possible.

moohound

poppasmurf_bewdley wrote: »

Only the financially well off or the financially inept have five credit cards. Which are you?

I had five credit cards and was undoubtedly the latter poppasmurf :rotfl:

debtcutter

poppasmurf_bewdley wrote: »

No, I meant that he should reduce temptation by getting rid of as many of his credit cards as he can as quickly as possible.

However, the OP has since stated that he has cut all his CC's up. But that is not as good as cancelling them, as he could always be tempted to order new ones.

Fair enough, though i disagree that what you gave is anything like good money saving advice.....

Surely the best thing you could do is give the best money saving advice? Which as I see it is:

- Pay off the most expensive debt as quickly as possible, paying the minimum off the rest. Some people like to cancel the cards, to stop them being able to re-spend it once they've paid some of the balance down.

moohound

debtcutter wrote: »

Fair enough, though i disagree that what you gave is anything like good money saving advice.....

Surely the best thing you could do is give the best money saving advice? Which as I see it is:

- Pay off the most expensive debt as quickly as possible, paying the minimum off the rest. Some people like to cancel the cards, to stop them being able to re-spend it once they've paid some of the balance down.

Some money saving 'Gurus' (Dave Ramsey for example) go with paying the smallest first for motivational reasons as the number of accounts reduces quicker. but to pay them off the fastest and hence pay the least actual money, the highest interest one should be the first target.

jeojadi

Thank you for all your advice. I've spent a good hour reading a few threads, and been in the Debt-Free wannabe section also.

I can see now I have been a total wally - this is not the way to go.

I've made up a spreadsheet of the 6 cards, their rates, minimum amounts and had a go on that snowball chart. I've asked my bank for a 6-month overdraft increase, and will look to blitz the cards.

Am I right in thinking that it is highest-rate, as opposed to highest amount, that I tackle first?

As in I pay the minimum on 5, and pay as much as I can afford off the highest rated card, then move on to the next?

AFK_Matrix

Yes the highest insterest card first, no matter the amount on it and the other 5 pay the minimum and then move onto the next highest interest card.

You say your going to ask for an overdraft increase but I hope you don't mean to use this increase to pay off the cards do you?

jeojadi

The overdraft increase is for £200, I will use it to pay off the £200 card, as the O/D is 1%, the card is 32%.