Loan to pay off credit cards, advice needed.

wmat983

I made the mistake of getting credit cards and deals have ended. I was wondering whether or not getting a loan (same APR) would be of any benefit?

At the moment I am using a high percentage of available credit which has a negative impact on my credit report so would getting load (same APR) to pay off credit cards be a good idea if I paid cards off but left the cards open so it looks as if I am not using a large percentage of my available credit?

MallyGirl

no - because your total available credit figure would have just doubled which brings its own negatives.
Have you tried the eligibility tool to see if you could get a balance transfer deal?
If not then you need to just tighten your belt and throw every penny at the cards till they are cleared. Paying off credit with credit puts you on a slippery slope.

Dobbibill

I wouldn't say a loan would be better as all you are doing is moving the debt from one to another. This is how consolidation starts and it can be a slippery slope.

How many cards do you have?
Limits & balances?
Any offers for BTs with existing providers?

Also make sure you address why you have the debt - without doing that there is a chance it will repeat itself in 6, 12, 18 months etc.

enjoyyourshoes

Generally its not worth consolidating debt.

The main reason being many people do not resolve the reason they got not debt in the first place.

Spend time analysing why you got into debt, triggers and possible solutions to remove triggers.

Day by day apply these strategies to unhook your self from the cause of the debt cycle.

The use every last available penny to throw at your debt and become debt free int he shortest possible time.

The save for the spending and accrue for medium term costs.

wmat983

I just called experian, he basically told me the pros and cons of doing it.

Pros...

Credit utilisation, won't be using most of credit available to me like I am now.

Cons...

Search on credit file. (I have applied and been accepted, however not signed for it yet but search will be on there regardless now)

Lower average age of accounts.

Dobbibill

You may benefit from reading this
https://forums.moneysavingexpert.com/discussion/5567669

sourcrates

welshmatt983 wrote: »

I made the mistake of getting credit cards and deals have ended.

Don`t compound your first mistake by making a second one.

Ignore what a credit reference agency tell you, they don`t lend you the money.

Consolidation can be a double edged sword, if you address the reasons why you got into debt in the first place, close down the avenues of credit you consolidate, and don`t take any further credit..........then it can work.

If on the other hand you go straight back to your old ways, and spend, spend, spend, you will be back here in 8 months time, with twice the debt, wondering for all the world, how it happened.

The DFW forum is full to brimming with people who went down this route, and did the latter, instead of the former.

It only works if your sensible.