Debt help required!!!

soupyjnr

Hi everyone

I hope I am in the right place! I am wanting some information on the best way to proceed. I have a number of credit cards, 6 in total. 2 are interest free and the other 6 aren't. Their combined balances are around £8800 and their APR's range from 18.9% to 27.9%. I have tried to get balance transfer credit cards but all it's showing me are Aqua cards, 0% for 6 months or similar and the balances are that big I wouldn't be able to pay them off in 6 months. 

I tried to get a loan from RateSetter however they declined me. They referred my details to 'everyday loans' who are offering me £9000, paying back £360 per month for 48 months. The APR is 36.9%. I understand this is very high and higher than my credit cards at present but it is appealing to have 4 credit cards paid off and have one monthly repayment. 

Any advice / guidance would be really appreciated. My head is a bit fried at the minute so any help at all I would really appreciate.

Thanks in advance.

enthusiasticsaver

I would not recommend consolidating your debt especially at 36.9%!!! It will cost you a lot more than tackling the cards one at a time preferably with the highest rate card first. It makes no sense at all to move the 0% cards you have.   Moving the cards to a loan is not paying it off and you may well be tempted to start building up debt on the cards again so you have a loan and credit card debt. Consolidation almost always leads to higher debt eventually.  How much are the monthly repayments at the moment and do you know how the  debt occurred in the first place?

soupyjnr

enthusiasticsaver said:

I would not recommend consolidating your debt especially at 36.9%!!! It will cost you a lot more than tackling the cards one at a time preferably with the highest rate card first. It makes no sense at all to move the 0% cards you have.   Moving the cards to a loan is not paying it off and you may well be tempted to start building up debt on the cards again so you have a loan and credit card debt. Consolidation almost always leads to higher debt eventually.  How much are the monthly repayments at the moment and do you know how the  debt occurred in the first place?

Thanks so much for your reply, I really appreciate it. Between the 4 cards the monthly repayments (I pay higher than the minimum payments) are approximately £280.. taking that into account I wouldn't be saving money per month. Basically I was a student and wracked up a lot of debt whilst at university. I earn a good salary now, £2000 per month, and have never missed a payment on any cards. Its just the interest atm that is killing me. Perhaps as you say, it may be best to pay the cards off one at time, starting with the one with the highest interest rate first. I assume if I were to do this I would just pay the minimum on the rest? I am not even going to adjust the payments to the 0% cards as I will have these paid off in full once the 0% period ends.

GeordieGeorge

Yes, the cheapest route is to pay the minimum on everything except the most expensive debt, and put everything that you can into that.

soupyjnr

GeordieGeorge said:

Yes, the cheapest route is to pay the minimum on everything except the most expensive debt, and put everything that you can into that.

That makes sense, thank you. Does this include the ones I am currently not paying interest on? So for example of the 6 cards, 2 are interest free. I am currently paying £100 each on them however the minimum is £25. Should I be paying the other £75 off the highest paying interest card?

GeordieGeorge

soupyjnr said:

GeordieGeorge said:

Yes, the cheapest route is to pay the minimum on everything except the most expensive debt, and put everything that you can into that.

That makes sense, thank you. Does this include the ones I am currently not paying interest on? So for example of the 6 cards, 2 are interest free. I am currently paying £100 each on them however the minimum is £25. Should I be paying the other £75 off the highest paying interest card?

Yes, that’s right.

There’s a bit of a wrinkle in the calculation of the 0% rates will end soon and revert to a very high rate. In that case it might make sense to clear the 0% cards before they go from being the cheapest to the most expensive.

TheAble

GeordieGeorge said:

soupyjnr said:

GeordieGeorge said:

Yes, the cheapest route is to pay the minimum on everything except the most expensive debt, and put everything that you can into that.

That makes sense, thank you. Does this include the ones I am currently not paying interest on? So for example of the 6 cards, 2 are interest free. I am currently paying £100 each on them however the minimum is £25. Should I be paying the other £75 off the highest paying interest card?

Yes, that’s right.

There’s a bit of a wrinkle in the calculation of the 0% rates will end soon and revert to a very high rate. In that case it might make sense to clear the 0% cards before they go from being the cheapest to the most expensive.

That's a very interesting observation. Eg if you have a 10% card and a 0% card, and the 0% runs out in 3 months and reverts to 25%, where do you allocate the funds right now...? Depends of course on how much balance each card is carrying but yes it does illustrate it's not straightforward.

Karonher

If you would pay more I would not consolidate especially if you can manage payment. Would it be possible to move a balance you can clear in 6 months to 0% and clear it by the time the 6 months is up? If the card you moved it from was also cleared they may offer you a deal.

sammyjammy

Why not post up the debts with the balance, minimum payment, interest rate (if 0% when it ends), how much you have a month to throw at them and people can advise the best way month on month.  It'll be gone before you know it!

gizmo111

soupyjnr said:

Hi everyone

I hope I am in the right place! I am wanting some information on the best way to proceed. I have a number of credit cards, 6 in total. 2 are interest free and the other 6 aren't. Their combined balances are around £8800 and their APR's range from 18.9% to 27.9%. I have tried to get balance transfer credit cards but all it's showing me are Aqua cards, 0% for 6 months or similar and the balances are that big I wouldn't be able to pay them off in 6 months. 

I tried to get a loan from RateSetter however they declined me. They referred my details to 'everyday loans' who are offering me £9000, paying back £360 per month for 48 months. The APR is 36.9%. I understand this is very high and higher than my credit cards at present but it is appealing to have 4 credit cards paid off and have one monthly repayment. 

Any advice / guidance would be really appreciated. My head is a bit fried at the minute so any help at all I would really appreciate.

Thanks in advance.

But you would save a considerable amount of interest in 6 months?

TheAble

gizmo111 said:

soupyjnr said:

Hi everyone

I hope I am in the right place! I am wanting some information on the best way to proceed. I have a number of credit cards, 6 in total. 2 are interest free and the other 6 aren't. Their combined balances are around £8800 and their APR's range from 18.9% to 27.9%. I have tried to get balance transfer credit cards but all it's showing me are Aqua cards, 0% for 6 months or similar and the balances are that big I wouldn't be able to pay them off in 6 months. 

I tried to get a loan from RateSetter however they declined me. They referred my details to 'everyday loans' who are offering me £9000, paying back £360 per month for 48 months. The APR is 36.9%. I understand this is very high and higher than my credit cards at present but it is appealing to have 4 credit cards paid off and have one monthly repayment. 

Any advice / guidance would be really appreciated. My head is a bit fried at the minute so any help at all I would really appreciate.

Thanks in advance.

But you would save a considerable amount of interest in 6 months?

True that. But six cards already is too many without opening yet more.