Large credit card debt - Am I headed to loan territory ?

toskdc

Hi. I have a Tesco credit card which I have been collecting the various valance transfers from my wife's credit cards. So far I have amassed £7000. Some of the balance transfers have reached the end of their 0% my first instinct is to do another balance transfer to another credit card so I can start to afford the repayments, but I'm wondering if some banks may baulk at taking on 7k of debt. Wondering if a 5 year loan to clear it would be a good idea. Although paying back more in the long run, it would be more likely to be accepted ?

I understand this is largely damage control, and doesn't stop more debt accumulating, but at least I'd be able to afford the repayments.

All help greatly appreciated

YorkshireBoy

What's the reason you've chosen to pay interest (at presumably circa 19% APR) on the credit card debt, rather than plan ahead and BT to 0% cards? Poor credit rating?...laziness?...forgetfulness?...low income?


With most cards charging minimum payments of 1% plus interest these days, £7K is going to cost you £70 a month to service at 0% interest. A £7K loan, on the other hand, is going to cost you nearly £150 a month at 9.9% APR...and incur circa £1,800 interest along the way!


So how does the loan option make it more affordable?

SHill

I think you and wife need to sit down discuss the ever increasing debt.

It sounds as if you had enough of paying things off..

enthusiasticsaver

Taking out a loan to consolidate credit card debt is a very bad idea. If you can balance transfer to other credit cards at 0% then make a plan to repay. As YB says the majority of credit cards accept a 1% minimum payment (I would suggest you pay over that if you can afford it) which is £70 per month. A loan will be way more expensive and less flexible.

Maybe you should also direct your wife to the DFW forum if she keeps spending on credit cards and cannot afford to repay. Apologies if this is not the reason for you taking over her debts.

chattychappy

Whether 7K is alot or not depends on your income. At my peak, I must have had 50K of CC debt and could still get credit.

Whilst you can get 0% deals (even perhaps with a 3% fee), that is always going to be better than a personal loan. But you the need the debt to be going down, not up. If it's rising, then at some point you won't be able to keep the plates spinning, regardless of what kind of debt you have.

Dobbibill

Consolidation of debt is not recommended - you need to think it through very carefully.

You need to address the reason you/wife has the debt in the first place. If you don't do this, it will happen again.

What happened to her accounts that the debt was BTd from?
Did she close them?
Were they kept open?
If so, are there any BT offers available?

If you continue with further BTs - make sure you plan ahead and aim to clear/reduce the debt before the BT offers expire.

toskdc

Many thanks for your help. It's certainly given me good for thought :-) Thanks again

MEM62

Large credit card debt - Am I headed to loan territory ?

It is definitely slippery slope territory if you do not address the root cause - ie your spending. This need to be your priority.

apollo13_2

chattychappy wrote: »

Whether 7K is alot or not depends on your income. At my peak, I must have had 50K of CC debt and could still get credit.

Whilst you can get 0% deals (even perhaps with a 3% fee), that is always going to be better than a personal loan. But you the need the debt to be going down, not up. If it's rising, then at some point you won't be able to keep the plates spinning, regardless of what kind of debt you have.

I have similar problem as OP. But I have 4 credit cards. About 11k debt in between them.

What would be the good route to this?

P.S. I am paying just the minimum (with interest) on each of them totaling £300 ish

[Deleted User]

apollo13 wrote: »

What would be the good route to this?

Cut costs.
Pay more off the debts.
Look at BT or other consolidation options.