Mortgage or Card?

JSBach_2

Hi

I have about £12k in credit card debts (2 cards - 1 @ 10k and 1 @ 2k) and the monthly repayments are crippling me. I am tempted to apply for the Citibank or M&S card so I can transfer the balance and pay it off gradually at a far better rate but I am worried that I won't be given a credit limit large enough to do this. There seems to be no way of finding out what they will offer you before actually applying. If I apply for a card and they give me a £1000 limit, it will be a waste of time and will affect my credit score. I don't think I have any credit score problems and I have stable employment at 26k p.a. but you never know what you will get!

My other option is to add this on to the mortgage as I am about to remortgage.

Any suggestions would be welcome.

jonesMUFCforever

If you put it on the mortage you will be paying interest on that £12k for the term of the mortgage. How many years will that be?

If your credit score is good you should be able to get a loan over 5 or 7 years to repay at decent rates (I would hurry though as rates are going up fast).

One last thing to consider and ask yourself is how have I managed to rack up £12k of debt?
Have you now changed your ways or will you be back in here in a year's time asking how to consolidate the loan and new card debt??

JSBach_2

Well, a combination of higher education, buying a house, some bad luck, muppet tax people and some ill-advised spending have got me into this situation.

My mortgage is another 22 years. I realise I will be paying it for longer but the added repayment is about £20pm instead of nearly £300pm on the credit card interest.

Have I changed my ways? Absolutely. The cards are going in the drawer except for certain things where paying by credit card is advisable (VISA protection etc.) but I have resolved to always clear the entire debt on the first statement.

micheline

Add it onto to your mortgage, then you don't need to worry no more. When you remortgage they will ask you if you have any credit cards & they will check out what you owe and if you do want to pay them off (i know cos i work in a mortgage shop). Thousands of people do this everyday to clear their debts off.
Don't put the cards in your drawer, cut them up and it will never happen again have a clean slate. Good Luck.

YorkshireBoy

Adding it to the mortgage is plain crazy IMO.

If you do decide to go the credit card route, be very careful to ensure you don't go for a card with minimum payments greater than you're paying at the moment. For example, many cards are 3% whereas you may only be paying 2-2.25% now.

However, I agree with ejones999. If you've 'mended your ways', a loan is the best option.

[Deleted User]

If you've got the will power and are organised you could put it on the mortgage but pay extra each month so as to pay off the extra borrowing over (say) 36 months (check your mortgage allows this). This requires diligence and not racking up more debt on your then empty credit cards. I know quite a few people who have taken this approach but had 5-10k more debt a year or so later 'cos the unused limits were too tempting so beware, although this can be the cheapest option.