Advance to pay Credit Card debts

wallace7

Between me and OH we have accumulated over £20K on credit cards which we are stuggling to shift. I am going to the bank next week for a financial review. Would it make financial sense to shift the C Card debts onto the mortgage.
Thanks in advance for your advice

Contemptuous

It more often than not reduces your monthly outgoings, but you have to bear in mind that you're then paying the money back over a very long time (I.e. The mortgage term could be 25 years) which would actually mean it's costing you more in the long run.
It depends what your priorities are really; freeing up money now, or paying back the least amount in interest.

wallace7

Thanks for your reply. I only have 12 years left on the mortgage I didn't really want to add more to it, but I am worried about the interest on the credit cards and the amount outstanding is starting to worry me.

enthusiasticsaver

The danger with this is that sometimes paying it off by borrowing long term costs you more as you are paying it back over a longer period and you need to address the reasons you accumulated so much credit card debt in the first place. Otherwise in a few years time you could have another £10-£20k on credit cards again plus a bigger mortgage due to the fact you took out an advance to pay off the previous amount. Why are you spending more than you are earning is the crucial question?


A better option would be to move the credit card debt on to 0% deals and focus on paying as much as possible to it monthly whilst looking at what you are spending every month.

kingstreet

In my experience, "the bank" is more likely to want to give you a personal loan than it is to increase your mortgage for debt consolidation.

If the mortgage route is really the way you want to go, you may end up having to remortgage to a new lender which will permit debt consolidation.

With no LTV or income information it's difficult to know what you might be offered.

wallace7

Thanks all for your advice. I have booked a financial review with the bank for tomorrow afternoon to look at the options available.
Enthusiastic Saver - I suppose the reason we have ended up in debt is that I work in the public sector and my wages are not going up with the standard of living, my OH runs his own business which has been hit hard by the economic crisis and so we have been finding it hard to make ends meet. However we are trying hard to cut our standard of living and find ways to make more income. I don't think we would find credit cards that would do 0% on such large amount.

indesisiv

It doesn't sound like a very good idea to me.
You haven't sorted out the underlying problem yet, so as it stands you would increase your mortgage payment and still have the other outgoings so you will end up in the same boat as you are currently but with a bigger mortgage to go with your debts too.
Have a look over here and have a think about posting your SoA (Statement of affairs) for the folks over there to help where you may be able to cut back.

wallace7

Thanks indesisiv I shall do that.