Help

Apple1234

Hi,

I have been a long time lurker on this site for a few years but never had the courage to post anything. I have three credit cards with large balances, HSBC 6800, Creation 7700, Barclaycard 7400. In total I am paying approximately 600 pounds a month just on the minimum payments on these and of course the balance is hardly going down.

I have been paying in this manner for approximately 5 years or more and it is plain stupidity on my part that I haven't tackled them before now. I have always paid on time and never missed a payment on anything apart from a default I have from HSBC since Sept 2013. This was on an account where I switched bank accounts and my new bank left a few direct debits on it and the balance creeped up before I realised. I did get every opportunity from HSBC to avoid this default but I stupidly ignored it. I settled this in January this year.

Anyway, between my default and my credit card balances, my credit report has suffered and I am unable to get a balance transfer credit. I am now determined to clear these credit cards and hopefully repair my credit report.

I am not sure why but over the last few years whilst I ignored the credit card debts I have managed to save 10,000 pounds instead of using this money to clear my debts. I am strangely terrified of using this money to clear what I can of my cards even though I know financially it makes a lot more sense.

The HSBC and Creation cards are the same interest rate of 24.9% and the Barclaycard is 14 %. What is the best way to start clearing these, pay off one and a bit of the other from HSBC and creation or split the amount and pay off both leaving say 2000 pounds on each ?
If I did this, do you think in time it would be likely that I could get a balance transfer card to clear the remaining debt quicker.

I appreciate any advice as when it comes to managing money I keep doing the wrong things !

Thanks

sivs

Hey!!! Speak to your current providers to see if they have any promotional rates on your existing cards? Barclaycard normally offer 6.9 for the life for balance transfer?

If they do I would clear the balance with your savings on the card that offers the best promotional rate and then transfer what ever you can to that card and then start paying as much you can off the card that is not on the promotional rate.

All in all you will pay less interest that way.

Hope that makes sense.

redpete

Look up snowballing. You keep up minimum payments on all the cards and use any surplus to pay off the balance on the card that's charging the highest rate of interest, then when that is cleared you move onto the next highest and so on.

Apple1234

Many thanks for the replies. I have contacted Barclaycard and asked the question so here's hoping for some good news

Again, Thanks.

Bay

Apple1234 wrote: »

I have managed to save 10,000 pounds

Thanks

Are you earning as much interest as possible on this and not just leaving it 'sitting there'?

If you are able to earn any more interest you could use this towards paying off the debt.