Advice On Consolidating Credit Card Debt Please!

MoneySavingRobinson

Hi all,

Some impartial advice please.

My other half has seven credit cards all with varying amounts of debt totalling £21k. They have varying interest rates, the highest bring 29% and the lowest around 2%. His credit rating has gone from Excellent to Very Poor over the last few months but he has not missed any payments or had any negative factors other than the fact that the amount of credit is high and the number of accounts held is high.

Should he try to transfer the debt onto a loan to get rid of all of the cards? None will offer any 0% balance transfers and none have any real movement by way of available credit to facilitate balance transfers between cards anyway.

I have suggested the loan route as an end to the saga but do you have any other ideas of getting out of this slow burning mess?

Thank you in advance!

stator

I don't know much about this but one important question will be:
Do you own your own home?

MoneySavingRobinson

Yes a homeowner (mortgaged).

grumbler

MoneySavingRobinson wrote: »

...His credit rating has gone from Excellent to Very Poor over the last few months but he has not missed any payments or had any negative factors other than the fact that the amount of credit is high and the number of accounts held is high.

Unless he earns £60K+ it's very unlikely that anybody gives him yet another £21K loan.
That said, every little helps if the loan is cheaper and the card is closed as soon as paid off.
'Consolidation' by itself doesn't solve anything without taking other factors into consideration. How can it "end the saga"?

Concentrate on repaying the highest interest balances and close the cards as soon as you clear the balance.

MoneySavingRobinson

Thankyou Grumbler, much appreciated.

PeacefulWaters

MoneySavingRobinson wrote: »

What a lovely response! This is my first post as a new member today and it seems I need to develop a thick skin to participate in this forum.

Let's assume stupidity isn't an issue. Consolidation may well be one of the best options I feel.

Really? I thought it was incredibly sensible advice.

Ok, I'll reword.

If he's not cured his spending money he hasn't yet earned issue, consolidation won't solve the problem

forgotmyname

Start on the cards with the highest interest rate and work down the line. Consolidating can have its pitfalls. The risk is spending on the cards again, Thinking they are debt free. When in reality all they have done is shuffled it around.

Needs to tighten the purse strings and dont buy anything unless essential.

Shame i didnt know that earlier also....

MoneySavingRobinson

That was a LOT easier to read and digest, thanks!

We can all judge and assume that people won't change, but this question is based on the fact that 'the stupid one' will not be keeping any of the credit cards once the balances are paid off and will not be applying for any new ones either.

bengal-stripe

MoneySavingRobinson wrote: »

I have suggested the loan route as an end to the saga but do you have any other ideas of getting out of this slow burning mess?

If your partner has 7 maxed-out cards with a total of 21k, the likelihood of getting an additional loan of another 21k is very slim indeed. Yes, the loan is intended to pay-off the cards, but the bank will have no certainty whether he will actually do it, and even if he does whether he won't run up his cards again (in addition to the loan). So in a year or two, he might have 42k owing.

Consolidation hardly ever works, unless you can alter the underlying reason of the debt, which appears to be overspending, which, presumably, has been going on for quite a few years.

cajef

Consolidation only works if people cut up all their credit cards and use the loan to pay them off, some get the loan then use it for other things and end up twice as much in debt.

However with a poor credit rating and that amount of debt it is doubtful anyone would give a loan unless he is a very high earner, as the debt is immediately doubled.

chattychappy

Has "other half" tried applying for any new cards? They have the best 0% deals. £21K might sound like a lot (you called it a "mess"), but I had more than double that and still got new 0% cards. In my case it was controlled and planned. It does come down to income and other factors of course.

Depending on your relationship, you could perhaps obtain a 0% card in your name and have the debt transferred. You would, of course, become liable so it really does depend on the state of your relationship and whether you are happy to take on the risk. People will surely leap in now and advise against this - but only you can decide. The idea would be that "other half" would meet the repayments. One option would, perhaps, be just to start off by taking on small amounts - eg 2 or 3K at a time to limit your exposure.