Debt Consolidation

Bugs789

Hi all

Around a year ago my wife lost her job my wages cover the bills but leave us a little short food wise so we have lived off our credit cards. I have used it for the cars mot and other bits and pieces.

Fast forward to today and now I'm struggling to makes the minimum payments I have thought of doing a balance transfer to a cheaper card I have also considered a loan. I just wanted others opinions which is the best route? My credit card is 37.9% so any half decent loan should be cheaper

Exerbusi2

At 37.9% your credit card is VERY expensive. I'd seek to get as much as you can on a 0% or as close as you can. There are calculators on this site that will give you an idea of how likely to be accepted on the credit cards you are.

I used this and was given a £9k limit with Virgin. The interest rate is 0% for 32 months. I paid off my loan using the CC and am now paying the CC back as fast as I can.

There is almost certainly a better deal out there than 37.9%, whether or not that's a loan or a credit card remains to be seen, but do some research and you'll find something out there.

Drawingaline

Ok, that is a ridiculous Apr. Yes attempting to get that onto a 0% card would be a good idea.

However you also need to address the overspending. Has your wife found new employment? Has the overspending stopped? What plan do you have in place if you need to pay for a large item, or car repairs etc.

You need to think long and hard as to wether you can spend less than you have coming in. Post up your soa (link in the sticky at the top of this board) and people can cast an eye over and give you advice on possible cost cutting measures.

Consolidation tends to be seen as not a good idea here. A lot of people have done it and then run up the cards again (myself included), however if you can totally change your mindset about spending, build up a small emergency fund to deal with the unexpected and totally stop spending on credit cards it MAY work. But looking at 0% first is probably best, then saving money by reducing outgoings or increasing income and throwing as much as you can at the debt alongside building up a small emergency fund.

sourcrates

Hi,

This is the usual run of events before reality hits you :

(1) Life changing event, job loss, relationship breakdown etc.

(2) Less income coming in.

(3) Use credit cards or loans for everyday living.

(4) Attempt balance transfers, all ok for the time being.

(5) "0" % deal runs out, gets another card.

(6) Cant afford minimum repayments, looks at consolidation loan.

(7) Advised against consolidating, as most times its just another step on the road to bankruptcy.

Well, hopefully not bankruptcy, but you get my drift.

Its a well worn path for someone in debt, people try all available options before seeking the one they should of gone with in the first place, and that, in a lot of cases, is some form of debt management.

Every other option is just shifting the debt around, it docent actually clear it much quicker, due to higher interest charges and fees associated with balance transfer.

If you cant meet the minimum payments on your debts, dont beat around the bush looking for magic solutions, contact one of the free debt charities for advice, before your debt problem gets any worse.

DCFC79

Bugs789 wrote: »

Hi all

Around a year ago my wife lost her job my wages cover the bills but leave us a little short food wise so we have lived off our credit cards. I have used it for the cars mot and other bits and pieces.

Fast forward to today and now I'm struggling to makes the minimum payments I have thought of doing a balance transfer to a cheaper card I have also considered a loan. I just wanted others opinions which is the best route? My credit card is 37.9% so any half decent loan should be cheaper

A consolidation loan wont work even if you could get one.

You need to post an soa and let others help you.

fatbelly

The soa calculator is here

http://www.stoozing.com/calculator/soa.php

Please format for mse.

Those are some wise words above. The only thing I would add is that credit card is likely to be something like Vanquis or Aqua and so is already an indication of poor credit history.

zippygeorgeandben

I have just applied for a CC to transfer a balance of £3300. It's been accepted and the new card is 25 months at 0% on balance transfers and no fee to transfer. It's been accepted with a £6500 credit limit. As soon as I get this card I'm reducing the limit to £3500. I'm not intending to spend on it and it's typical of the banking industry to offer more than I actually requested. There are some good deals to find if you look.