Loan to clear credit cards?

System

elsmore1 wrote: »

Hi All,

I have some credit card debt of about £2000 on a 4.9% for life so I am OK with leaving this.

Then you're mad. If you're only making the minimum repayments it will take the thick end of 40 years to repay.

elsmore1

Hi,

I think most people are mad! But I agree but I will try to pay a bit more off to that card or see if I can increase the monthly payment. By saying I am OK with it I mean that the rate is 4.9% which is much lower than the card I have in excess of 20%!

Thanks

Money_Rollercoaster

Don't confuse chances of approval with likelihood of being offered the headline rate as they are different things. You might get offered a loan and yes, your chances of approval might be 85%, but lenders only have to offer the headline rate to 51% of applicants it approves.

elsmore1

Thats true, and thats why the balance transfer that everyone seems to suggest is great if you get 0% for 43 months for 6k, but I often seem to get 0% for a about a year or so and not for as much as I want.

Also I did the balance transfer a while ago now and I got a letter saying they would put my rate up to 25% or more unless I agreed not to use card it would be 20% or something in that vein, maybe they have stopped doing that now but it seemed unfair and I assume it was because I was not spending on the card.

[Deleted User]

No. That's risk based pricing. Customers will have rates increased or decreased according to the risk they represent.

elsmore1

In the end I have opted for a loan at 9.9% as that's the best deal I could get, to clear it all in 5 years. I have had credit cards for years and would never clear them. I know this is best for me as I will save in interest and will pay them all off and cut them up.

There are a lot of loans advertised at low rates and 0% balance transfers for long terms but like has been said before only 51% of people need to be picked at that rate. I wont achieve the best loan rate or BT deal so have opted for a set payment plan in a loan.

I will pay off my credit cards and cancel them.