Credit/Loan/Debt Help!

Murder_on_Zindanes_Floor

Hi, 

I've been trawling through the website and Forum for some help but haven't quite found the right thing... plus some conflicting advice. I'm hoping this community can provide some help from their experience to navigate me through this minefield!

I have a 'normal' credit card, a 'balance transfer' card, Paypal Credit debt and an outstanding personal loan.

The standard credit card has finished its 0% purchases period and still has some credit on there.
A portion of the balance on the balance transfer card is coming to the end of its 0% interest period.
Paypal credit is just an absolute pain and I want to get rid of it!
and the personal loan has about 2 years left to pay.


I am unsure whether to put all of the credit onto another 0% balance transfer card and use a 0% money transfer card for Paypal. 
Or
Consolidate all debt into one personal loan and cover everything.

I will say, that I can afford to pay the repayments on all the debt, but I just want to make things easier on a monthly basis... and keep a bit of extra money in my wallet, rather than give it to the banks!

Any and all help would be greatly appreciated!

Mark_d

Using 0% cards will almost certainly be cheaper than a personal loan.  If I was you'd I'd try to pay off all these debts before trying to accumulate money in your wallet.
Personally I repay all my credit cards in full each month by direct debit.  The only debt I have is an interest-only mortgage.  In my view this is a good place for someone to get to.

fatbelly

Can I just say that I love your username.

I presume the conflicting advice is around debt consolidation.

That is a conflict between theory and practice. In theory consolidation works. In practice it usually doesn't and on this board we like to be practical.

Your plan to move the card debt to 0% balance transfer card(s) is good. You may find a money transfer card difficult to get*. In any event concentrate on getting rid of the Paypal debt, though to check I am giving the right advice it would be helpful if you could state the apr of each debt

*The latest mse article on these shows only two providers and one of these is not a particularly good offer 
https://www.moneysavingexpert.com/credit-cards/money-transfers/

RAS

Yep, please quote APRs on debts, value and the end date of any 0% deal.

You do need to get you head round clearing these debts. Since you are motivated to clear the Paypal debt, that's a good aim, unless you are paying a higher APR on the other debts.

Murder_on_Zindanes_Floor

fatbelly said:

Can I just say that I love your username.

I presume the conflicting advice is around debt consolidation.

That is a conflict between theory and practice. In theory consolidation works. In practice it usually doesn't and on this board we like to be practical.

Your plan to move the card debt to 0% balance transfer card(s) is good. You may find a money transfer card difficult to get. In any event concentrate on getting rid of the Paypal debt, though to check I am giving the right advice it would be helpful if you could state the apr of each debt

Thank you... The old fantasy league names come in handy for anonymous usernames!

Yes, debt consolidation seems to have many different opinions... and theories.
Practicality is good and I already feel like this community is 100% better than information that's online.

The appeal of a loan is that it will all be in one place, with a 'final payment due'. Rather than swapping credit cards as and when I need to.

The paypal was great, but much of the debt was accumulated by a younger, less money aware, version of myself. That is being cleared as quickly as possible.

Murder_on_Zindanes_Floor

@Mark_d @fatbelly @RAS

Thank you all for your replies. The APRs Values and end dates are as follows...

Standard CC - £1200, APR 21%
Balance transfer - Total value is £8000, Value that is reaching the end of the 0% period is £2k... APR 21% in November '25. Its likely that a similar value may be coming towards the end of the 0% period early in 2026.
Paypal - £1500, APR 23%

I think the best option could be a new 0% balance transfer and focus on clearing the paypal credit first, then increase payments on the rest of the debt.

CliveOfIndia

Murder_on_Zindanes_Floor said:

I think the best option could be a new 0% balance transfer and focus on clearing the paypal credit first, then increase payments on the rest of the debt.

As far as it goes, shifting to another 0% card(s) is likely to be the cheapest option - assuming you're able to get one, of course.  You won't be able to Balance Transfer the loan to a credit card, but a Money Transfer card may be an option.

As always, you'd need to factor in any fees imposed for doing the transfers.  And put money aside to clear the card when the promotional rate expires - you can't bank on being able to do another BT for any remaining balance.

And yes, when you clear one debt, throw the spare money towards the other debts, starting with the one that's charging the highest APR.

Murder_on_Zindanes_Floor said:

Yes, debt consolidation seems to have many different opinions... and theories.

In theory, debt consolidation is fine - it makes eminent sense to shift credit card debt that's charging 30% interest to a loan that charges 9%.  Although, the longer the loan goes on for for, the more you'll pay in interest, so you need to take account of both the APR and the duration of the loan.

The two sticking point are these.  Firstly, it's all too easy to get a loan, clear the cards, then merrily go out and start racking up the debt on the cards again.  Soon you're saddled with twice the debt.  Not such an issue if you are genuinely super-disciplined, and there's no underlying problem (living beyond your means, gambling, whatever it may be) which means you can't help but get into debt again.

The other issue tends to be getting accepted for a loan.  Put simply, there's no way a lender can force you to use the loan to pay off the cards - you could just as easily spend it on a new car, a holiday, whatever.  So when they run their affordability calculations, they have to assume that the loan will be in addition to - not instead of - the existing debt.  Which means they may well simply decline your application outright, or else offer you a much higher APR than the headline rate.

I'm not saying any of these scenarios apply to you particularly - those are just the reasons why consolidation loans are not always the easy solution that they may appear to be.

Murder_on_Zindanes_Floor

CliveOfIndia said:

Murder_on_Zindanes_Floor said:

I think the best option could be a new 0% balance transfer and focus on clearing the paypal credit first, then increase payments on the rest of the debt.

As far as it goes, shifting to another 0% card(s) is likely to be the cheapest option - assuming you're able to get one, of course.  You won't be able to Balance Transfer the loan to a credit card, but a Money Transfer card may be an option.

As always, you'd need to factor in any fees imposed for doing the transfers.  And put money aside to clear the card when the promotional rate expires - you can't bank on being able to do another BT for any remaining balance.

And yes, when you clear one debt, throw the spare money towards the other debts, starting with the one that's charging the highest APR.

Murder_on_Zindanes_Floor said:

Yes, debt consolidation seems to have many different opinions... and theories.

In theory, debt consolidation is fine - it makes eminent sense to shift credit card debt that's charging 30% interest to a loan that charges 9%.  Although, the longer the loan goes on for for, the more you'll pay in interest, so you need to take account of both the APR and the duration of the loan.

The two sticking point are these.  Firstly, it's all too easy to get a loan, clear the cards, then merrily go out and start racking up the debt on the cards again.  Soon you're saddled with twice the debt.  Not such an issue if you are genuinely super-disciplined, and there's no underlying problem (living beyond your means, gambling, whatever it may be) which means you can't help but get into debt again.

The other issue tends to be getting accepted for a loan.  Put simply, there's no way a lender can force you to use the loan to pay off the cards - you could just as easily spend it on a new car, a holiday, whatever.  So when they run their affordability calculations, they have to assume that the loan will be in addition to - not instead of - the existing debt.  Which means they may well simply decline your application outright, or else offer you a much higher APR than the headline rate.

I'm not saying any of these scenarios apply to you particularly - those are just the reasons why consolidation loans are not always the easy solution that they may appear to be.

Thanks for your comment, I think it explains it very well.

Its just takes a bit to get your head around it all. I've been swimming in the numbers all day. If only I knew back then what I know now!

I agree with your point regarding balance transfers down the line. I may be okay now, but could get rejected in the future, then be left with no option but to pay the interest. Definitely food for thought.

Your comments about debt consolidation makes sense too. I'd like to think that generally, I'm pretty good with money now. So when the cards are paid, the accounts will be closed.

This is all giving me a headache, but I really appreciate your comments.

RAS

Unless the interest rate on reversion is over 23%, concentrate on clearing the Paypal debt.

kimwp

RAS said:

Unless the interest rate on reversion is over 23%, concentrate on clearing the Paypal debt.

I'd say, even if it is (unless it's silly%), it's likely better to throw all spare at paying down the highest interest debt than hold some back for when the 0% expires. But as it's 21% Apr, then it's a clear decision to throw everything at the PayPal debt.

Another fan of your username op!