Another loan vs cc question

kaizoku

Hi,
Sorry about yet another Loan v Credit Card as I'm sure another post has been posted in the past.
I'm looking for some advice from you fine gents and ladies.

Is it better to have:
2x cc and 1x loan OR just 3x cc?

I currently have:
1x interest free cc which i am paying off bit-by-bit - (9k)
1x loan (14k)
1x interest and purchase interest free for every day use

I would like to change the loan to an interest free cc, so i don't have any loans.
Is this a good idea? or shall i just stick with what i have?
Does it make any difference in not having a loan?

onlyfoolsandparking

Personally I prefer credit cards to loans for the flexibility they offer in moving balances around.


Are you asking to change the full 14k loan onto one credit card, if so that's a big ask!! doubt you will qualify for a card with a 14k limit straight away although I don't know your financial income and expenditure so could be wrong on that comment.


And you will need a money transfer card in order to pay the loan off, even harder to get with a big starting limit.


Another option pay off more to the debt which carries the higher interest rate or apply for new cards but space out the applications see if you can balance transfer the 9k when deal runs out then see if your existing card offers you a money transfer.


To be blunt there are probably lots more permutations of what you can do but ultimately debt is debt whether it's credit cards or loans, secret is to borrow as cheaply as possible and make sure cards are paid off or balance transferred before 0% deals expire.

[Deleted User]

You may not get a CC with a limit to cover the cost of the loan.

You’ll also need to apply for a money transfer card and pay the fee to transfer the amount as well.

Terry_Towelling

Getting as much debt as possible onto as low a rate as possible is always going to be best in terms of total outlay.

However, there are some downsides if money is tight. For example, the credit card minimum payment might be higher than the loan repayments and your monthly outgoings may increase, albeit for a shorter overall time than if you kept paying the loan.

Craig1981

cindy7u - you seriously thing people will fall for your spam? - post reported

PixelPound

So is the orig Q whether a loan or a credit card looks better? Don't think there is much difference, its still all repayments that affect affordability. I would 100% definitely avoid any option such as cindy7u is proposing, as any credit card that can have limit easily moved up would have a sky high APR.

The card v loan is IMO really about saving interest. Shifting loans to 0% card depends on a number of factors - loan APR, card transfer fee, length of 0%, and what you aim to do at the end. The transfer fee and length of 0% will give you an equivalent APR - if you have a 5% fee for 30 months at 0% its the equivalent of a loan with 4% APR, so shifting to 0% isn't always the best option. You also need to consider whether the balance will be paid off by the end and what you will do at the end if not.

If you did manage to get one provider that would give you a £14K limit, could you get a second at the end who would accept transfers from the first (cards in the same stable can't usually be balance transferred)

jonesMUFCforever

What is the APR on the loan?

To get into that amount of debt suggests overspending over a continued timescale - so what steps has the OP taken to stop this for the future or in 2 years he will be back here asking about double the debt.

kaizoku

Thank you for all your input.

onlyfoolsandparking wrote: »

Are you asking to change the full 14k loan onto one credit card, if so that's a big ask!! </QUOTE>
Yes, and yes I realise it's a big amount and doubtful whether I will get a money transfer

Craig1981 wrote: »

cindy7u - you seriously thing people will fall for your spam? - post reported

What did cindy7u say?? I'm curious.

nic_c wrote: »

So is the orig Q whether a loan or a credit card looks better? Don't think there is much difference, its still all repayments that affect affordability. I would 100% definitely avoid any option such as cindy7u is proposing, as any credit card that can have limit easily moved up would have a sky high APR.

The card v loan is IMO really about saving interest. Shifting loans to 0% card depends on a number of factors - loan APR, card transfer fee, length of 0%, and what you aim to do at the end. The transfer fee and length of 0% will give you an equivalent APR - if you have a 5% fee for 30 months at 0% its the equivalent of a loan with 4% APR, so shifting to 0% isn't always the best option. You also need to consider whether the balance will be paid off by the end and what you will do at the end if not.

Thank you for the working out nic_c.
The loan's interest is 6.7%
I'm hoping if I manage to get a loooong MT offer with a small transfer fee for the full 14k, it would make sense to go for it.
If I pay off the loan now, I would be saving around 1500. I know it's not a lot compared to my total debt, but it's something.

nic_c wrote: »

If you did manage to get one provider that would give you a £14K limit, could you get a second at the end who would accept transfers from the first (cards in the same stable can't usually be balance transferred)

Really? So I could only to a MT only once and stick to it until I pay off the amount??

jonesMUFCforever wrote: »

What is the APR on the loan?
To get into that amount of debt suggests overspending over a continued timescale - so what steps has the OP taken to stop this for the future or in 2 years he will be back here asking about double the debt.

:-D it wasn't an overspending Mr Jones. It was a loan to pay off another loan and some extra which I took over 2 years go. I haven't needed to take another loan and I'm not planning to another loan any time soon.
I'm just trying to see if I could make some changes to make it easier for me to manage my finances if I just had CC's as opposed to having a loan and CC.

[Deleted User]

A loan to pay off another loan for £14k and a credit card with £9k owing on it.

That’s £23k of debt before you even start.

It’s unlikely you’ll get a MT card - have you tried an eligibility checker?

It won’t tell you what limit you’ll get unless you’re successful in applying.

onlyfoolsandparking

"the loans interest is 6.7%" its not the worse rate you could have, sure there are lots better for that amount BUT there are also lots worse so there you have it.


IMO you will not get a CC with 14k starting limit, seriously no chance! so I think your best option is to bang as much as you can every month off your existing loan, sometimes its good to borrow more and move money around BUT only if you've got all your bases covered and contingency plans in place, unfortunately you haven't.

kaizoku

I'm doubtful of getting the 14k as well. Surely it's worth a go to apply for a MT card for the full amount and hope for a long period...say 24months?
If I did get the MT card, would I be better off? And then near the end of the interest free period, I imagine I could do a BT to another card...?