would a loan/cedit card be stupid?

rach!_3

hi there
i actually sat down and tried to work out how much we pay out a month on debts catalogues etc i got so far and stopped, so we discussed it last night and wondered if getting a loan or credit card paying them all and only have that a month to go out would be any better, i'd say £2,000 would cover them all and maybe leave us around £100 after everything has been paid.
would it just be conpletely stupid and not reduce our outgoings at all?
we used to give the kids £3 a week each in pocket money but we havent been able to do that for a while.
any advice greatly appreciated.

Burlesque_Babe

A loan to consolidate your other credit is rarely a good idea as you are paying interest on interest, but if you can transfer is all onto a 0% credit card and then close all the other accounts/cut up the cards and concentrate on paying it all off, then yes, that is a good idea.

rach!_3

the only thing that worries me is we wont be able to get a credit card, not because we have bad credit we dont, its just up until recently we had no credit(recently 18 months ish) although we have been told by mortgage advisor that in the last 8 months our credit rating has gone from 139 to 296 but went onto moneysupermarket to compare cc and it said "your credit rating is poor"

rach!_3

bump for people to see

MrsTinks

Personally I think consolidation is a bad idea... I've done it and I won't be doing it again!
If you go the consolidation route you have to be 100% diciplined! Cut anything that looks like a credit card, and never be tempted! Once your debt is in a loan then it is too easy to run up new debt and many loans won't let you over pay every month to pay it off quicker.
Have you tried the snowball calculator? Is it worth just tightening the belt for 6 months etc and be debt free?

bank_of_slate

A loan often seems like a good quick fix!
I should know, I did it 4 times before I finally woke up and found this site after 12 years and £36,000 of debts with very little to show for it.
4 times!!!!
Each time paying things off and then 'rewarding myself now that I can afford it'
what an idiot I was.

Think VERY carefully before you get a loan and if you do get a loan it must be a one off
Learn from so many of us.....do not run debts up again so no catalogues, cards etc!!!!!
...Linda xx

RAS

Consolidation is very rarely a good thing.

You would be better off doing a Statement of account, see here http://forums.moneysavingexpert.com/showthread.html?t=107280

Then people can help you reduce your spends and pay your CCs off.

To give you an idea on the credit rating, excellent is 750.

Inn the short-term, get rid of the catalogues and join the local group on www.freecycle.org - like e-bay but the goods are given away free. great for toys, kids clothes in particular and household stuff. Do you have anything knocking about the house that you can put on e-bay or sell at a car boot sale?

kizzykizzywizzy

Hi Rach, I don't really know what to say, I haven't had catalogues for years as everything in them seems to be so expensive ( the way they get thier money without adding interest ) but also now I think they do seem to add interest to larger items, so it's dependant on how these debts are made up.
As I say I don't know what to advise, as I would've & am going by the 0% credit cards, but if you have a poor credit rating, you may be refused.
The only thing I would say is that you don't owe a huge amount, so it would be good to nip it in the bud & throw the catalogues away!!! if the kids need clothes primark is very cheap, or boot sales, you'd be surprised at what I've picked up for 50p
I'm sure you've cut back already, but perhaps if you post exactly what your debts are aprs etc & your income / outgoings ( SOA ) someone may be able to give you some ideas how to save a bit more & make things a bit easier for you

rach!_3

thanks all and hi kizzykizzywizzy(we have a cat named kizzy and thats her nickname, lol) anyway, we dont have any credit cards, we have a jdwilliams and a littlewoods account each and we have a couple of provident loans and one from a place called naylors, also a few things that say we thought had been fully paid and they send letters out and we have agreed to pay so much a week/month just actually worked this out and its a total of £431 a month we are paying on these things.

RAS

Rach

You need to list your income, expenditure and each of those debts and the APR alongside it

Income

me
OH
CTC
CD
WTC
CB
HB?

Living costs
Rent/mortgage
CT
Food
Electric
Gas
etc

Debts

jdwilliams me
littlewoods me
jdwilliams OH
littlewoods account OH
provident loan1The APR will be horrendous
provident loan2 ditto
naylors

Much more scary

also a few things that say we thought had been fully paid and they send letters out and we have agreed to pay so much a week/month

Have you ever seent a letter demading the Consumer Credit Agreement on these to check that you do owe them? Or just paid people who rang and claimed that you owed them?

its a total of £431 a month we are paying on these things.

If you really do only owe £2000, then you are paying 20 percent per month which is 240% per annum.

Anything over 15% pr annum is stiff, over 30% and you cannot pay off the principal by paying the mininimum and your debts increase over time.

rach!_3

well one is a catalogue from around 6 years ago
one is overdraft from YB
one is an un authorised OD from citibank when we changed banks
one is an over payment of HB from when my OH started work
one is an old insurance that had charges stuck to it if you cancelled which my OH was not warned about(for a moped)
we dont even have insurances fpr anything at the moment which is why i want to get all this paid off so we can get some.