Advice about a credit card?

kate1irwin1

Hello,
I currently have 3800 on a capital one credit card with high interest rate. I pay 150 a month, but the interest is around 100. I was declined for a 0% balance transfer card from Tesco, am wary about applying for another one as my credit rating isn't great so more applications will make it worse. I might be able to get an overdraft from my bank, but not sure what interest rate would be....
So I suppose the question is, what is the best way to pay this off asap?! Try and transfer or get overdraft and risk even worse credit rating...or just keep plugging away and suck up the interest?
Thank you in advance!

sourcrates

Hi,

It all depends on how much of a problem you perceive it to be.

There are different levels of “help” you can access, it’s difficult to advise when we don’t have the full picture, but you could write to the card company, tell them your struggling, ask them to freeze interest for a while.

This may effect your credit file though, another option is to pay more than the minimum each month to pay it off quicker, or if it means you arnt eating because of the payments, default on them.

It depends on your personal situation as to how you approach this.

System

Can you ask your employer for an advance maybe? Or try a peer to peer loan if it's cheaper.

You could apply for a 0% card again if you soft check first.

peteuk

At the current rate you will pay your credit card off in about 5 years. This is simply how credit cards work and a lot of people (including myself) pay the minimal payment. Whilst your payment covers the interest, then the credit card company will be content, your running your account in what they will view a positive way (you owe them, they are getting regular payments and your covering the interest and some)...

Speak to your credit card provider, they may be able to help.

As suggested look at a soft application before applying for your next credit card but if you do get a 0% balance transfer then you need to be disciplined to pay it off during the 0% period. Avoid the temptation to spend on it.

Fireflyaway

Don't borrow to pay debt. Do you have any spare money at the end of the month? Can you make some savings and increase the amount you pay off? If so I'd just throw everything at it and close the account.
Often taking out consolidation loans or zero interest deals just moves the debt about and removes the feeling of urgency. It doesn't solve much. Your debt is not a huge sum and you have an income so you will make progress. I'd use this episode to teach yourself never to do it again. It wasnt until I felt desperate that I made steps to change my behaviour.

kate1irwin1

Thanks everyone. Although yes I can manage the 150 payments, its a massive chunk of my budget, basically means living v frugally, so not having it would mean more treats for my son etc, not having to worry when something unexpected happens and building up an emergency fund - at the moment I basically just live on what I earn with nothing spare at all.
Yes, its completely my own fault for having it, and don't use it anymore, just wanted to see what the best options were for paying off asap! I do pay a little more when I can eg 50 xmas money went on to it. I might soft check other 0%, not sure what peer to peer loan is?!
Just changed energy suppliers so should be about extra £10 a month on there...every little helps!
I understand what you mean about not borrowing to pay debt, just thought if I could pay less interest, more money to debt would get it paid faster!
Thanks again

Dobbibill

Definitely don't use an overdraft to pay it - it's one of the most expensive forms of lending and can be pulled with little/no notice.

Have you tried the eligibility checker for your chances on 0% BT deals.
If you are able to switch it to a zero percent deal, the £150 would clear it in under two and a half years.

Maybe try one more application if you've only tried Tesco at the moment. Failing that, throw every spare penny at it, sell things, get overtime - anything to get rid of it sooner.

binaryuniverse

Fireflyaway wrote: »

Don't borrow to pay debt.

Nonsense. If you can borrow at 0% to pay off a high interest debt, then you should certainly take this option, if possible. The debt will be cleared a lot faster.

Tesco are one of the easier 0% cards to get, for people with slightly poorer credit ratings. If you can't get one of those, I'd reckon it'll be difficult to get one of the others. But try some soft searches and eligibility checkers. If you haven't signed up to Credit Club, do that and see if it gives you any cards with a decent chance of getting.

The other card that is easy to get is Capital One's 6 months at 0% BT card. But that's not an option, unfortunately. I don't know of any other 'sub prime' cards that offer BT at 0%.

If you can't get a 0% card, then call Capital One and ask for an interest rate reduction. But keep throwing £150 (and more if you can afford it) at the debt. The more you pay, the sooner you'll get it paid off.