We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Egg card - a tip
calibrax
Posts: 385 Forumite
This may well apply to other cards as well, but I'll tell you my story.
I've been paying off various debts over the last few years including a CCJ, and I can now see a light at the end of the tunnel. Because I had a lot of defaulted debts to clear and I'd agreed payments with those creditors, I didn't have much money left each month to pay off the one debt I hadn't defaulted on - my Egg card with an approx. £12,000 balance.
The interest rate on this card was a whopping 21.9%. So it was costing me just over £200 a month in interest. I would pay £400 to the card each month, and use £200 to pay some bills, so at the end of each month the balance never went over £12,000 and the interest was covered.
As my defaulted debts began to clear I was able to allocate more money each month to those remaining, so one day I called up Egg and they were happy to convert my card balance to a loan... at just 14.9% APR. Which works out as £276 per month over 5 years. So for an extra £76 a month, I'm now actually paying off the £12,000 rather than just maintaining it at the same level. I couldn't get a loan anywhere else, so this was the best solution for me.
So, on the loan I'll be paying a total of approx £4,600 in interest, and the total balance will be completely clear in 5 years. If I'd carried on as I was, after 5 years I'd have paid over £12,000 in interest, AND I'd still owe the original £12,000 balance! :shocked:
The loan is also totally flexible, I can pay off more at any time and save more interest. So once my credit rating is improved and I can get a loan elsewhere, I can hopefully move to a loan at a lower interest rate.
So, if you have an impossible balance to manage, it's well worth seeing if it can be converted to a loan. Thanks for reading, and I hope this helps someone out there!
I've been paying off various debts over the last few years including a CCJ, and I can now see a light at the end of the tunnel. Because I had a lot of defaulted debts to clear and I'd agreed payments with those creditors, I didn't have much money left each month to pay off the one debt I hadn't defaulted on - my Egg card with an approx. £12,000 balance.
The interest rate on this card was a whopping 21.9%. So it was costing me just over £200 a month in interest. I would pay £400 to the card each month, and use £200 to pay some bills, so at the end of each month the balance never went over £12,000 and the interest was covered.
As my defaulted debts began to clear I was able to allocate more money each month to those remaining, so one day I called up Egg and they were happy to convert my card balance to a loan... at just 14.9% APR. Which works out as £276 per month over 5 years. So for an extra £76 a month, I'm now actually paying off the £12,000 rather than just maintaining it at the same level. I couldn't get a loan anywhere else, so this was the best solution for me.
So, on the loan I'll be paying a total of approx £4,600 in interest, and the total balance will be completely clear in 5 years. If I'd carried on as I was, after 5 years I'd have paid over £12,000 in interest, AND I'd still owe the original £12,000 balance! :shocked:
The loan is also totally flexible, I can pay off more at any time and save more interest. So once my credit rating is improved and I can get a loan elsewhere, I can hopefully move to a loan at a lower interest rate.
So, if you have an impossible balance to manage, it's well worth seeing if it can be converted to a loan. Thanks for reading, and I hope this helps someone out there!
0
Comments
-
That's great that you can save interest and you're able to pay off extra if your finances improve. There are many who warn against taking out loans to pay off credit cards because of the danger of racking up the spending on the card again, so make sure you don't fall into that trap!
Don't stress, relax, let life roll off your backs. Except for death and paying taxes, everything in life is only for now... Avenue QOfficial DFW Nerd Club - Member no. 003
Proud to have become debt free... and striving to keep it that way
0 -
Not a problem in this situation, as one of the conditions of giving me the loan was the cancellation of the card at the same time. Temptation removed!0
-
This sounds like a very workable solution!!! Thanks - I'll give that a go too!!0
-
Not a problem in this situation, as one of the conditions of giving me the loan was the cancellation of the card at the same time. Temptation removed!
Can't be true - Egg actually giving useful advice - never - is it freezing in hell or what :eek:
Seriously - good advice and if you can get a cc company to do this then all the better but you're right - don't fall into the trap of then spending again. Well done.'Proud To Be Dealing With My Debts' : Member number 632
Nerds rule! :cool:0 -
well done :T very shrewd of you:pComping again - wins so far : 2 V festival tix, 2 NFL tix, 6 bottles of wine, personalised hand soap, Aussie miracle conditioner :beer:
Married my best friend 15/4/160
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 355.7K Banking & Borrowing
- 254.9K Reduce Debt & Boost Income
- 456.1K Spending & Discounts
- 248.3K Work, Benefits & Business
- 605.8K Mortgages, Homes & Bills
- 179K Life & Family
- 263.6K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.7K Read-Only Boards