Advice to a fairly lucky newbie

laughingboyuk

Hi. First post. Really impressed with some of the stories on here.

Ill admit Im pretty fortunate to have a good income and ive cut some of my debts over the years but i need some advice on this bit please.

I owe £26k between 2 credit cards and an overdraft (Virgin cc 14k, halifax cc 8k, overdraft 3k). Ive stupidly taken my eye off the ball while paying down other debts and let the cc's drift up again paying minimum per month which is costing me about £4k per year in total -this is just a stupid waste!

Two old loans are finishing in the next few months, ive got about a 3k tax rebate coming so just wanting advice on the best way to approach this to clear it quickly- bearing in mind the finishing loans are costing me about £800 per month at the moment which i can now use to clear the other debts.

My options as i see it start with putting the £3k into whichever one is costing me most then either get a new loan for the remainder or move to a new 0% credit card with an upfront cost then pay it off before it reverts to higher APR.

Thoughts please!

enthusiasticsaver

When clearing debt you do the most expensive first - this is likely to be the overdraft. Move the rest to 0% credit card - don't take out new loan as this will cost you more in the long run. Get rid of one of the credit cards as you pay them off.

Dobbibill

I agree with enthusiasticsaver - the OD is likely to be the most costly.

Your rebate will be the exact amount you need to pay it off....and remove it so the temptation is no longer there.

For the other debts I would complete a SOA so you have everything budgeted for on a monthly basis then look at snowballing the previous loan money onto the CC and give you an idea of a DF date. If you can get some of the CC debt onto a 0% BT deal then that's a bonus.