New user, help please!

chimmers

Hi all

This is my first post and from what I've read so far it looks like I've come to the right place, it's great to see how everyone supports each other here. Please bear in mind that I'm a complete debt noob so if you could keep jargon to a minimum that would be great thanks!

Like most people on here I'm in a bit of a debt mess and am seeking some advice on the best way to claw my way out. Here's my history:

I currently owe around £13,500 across five credit cards. From balance transferring from old cards to new cards for the lower interest rates, I've now ended up with five and obviously this means five different interest rates. I can afford to pay the minimum amounts off each month and sometimes a bit over but I am going nowhere fast with bringing the total debt down - if anything I'm treading water.

I thought about a loan to pay off my all cards with, meaning just one interest rate to pay each month instead of five. I applied for an Asda loan of £14,000 payable over 3 years and just got approved for it, however the APR is a whopping 19% and my monthly repayments would apparently be £523.06 which is do-able on my wage, but would mean that I'd be living on the brink each month for the next 3 years and that scares me, quite frankly.

I'm desperate to pay off these debts and was wondering what you folks would do - can you refuse a loan once it's been offered and if so, does it harm your credit score? Should I get MORE credit cards with lower rates to shift my existing balances onto instead? I'm worried that having so many cards will get too confusing and expensive as I don't want to end up with ten! I am currently investigating good LOB rate cards, would this be a good alternative solution?

HELP! Any advice would be greatly appreciated, thanks x

GeorgeUK

Welcome to the board

First i would advise posting up a statement of affairs (SOA)
http://www.makesenseofcards.com/soacalc.html
This will help us see where any savings can be made as well as looking at the debts you have so we can help you start attacking these.

I would advise looking at your credit report (free at experian if you cancel within 30 days) and see how many credit checks you've had recently. You can have about 3 in a 6 month period before your credit score is affected so don't go rushing to apply to everywhere.

LOB cards are probably the right route to look at as well as possibly 0% promotional offers such as the virgin money card currently has.

NUFCnutter

Hi :wave: , you've come to the right place. If anyone can help you these guys can.

Seaxwyn

Hi chimmers and welcome

If you can afford to pay the minimums on each card and a little extra off one, then you're better off saying no to the loan.

Enter the details into the Snowball Calculator on https://www.whatsthecost.com and it will show you exactly how long it will take to pay off the cards, and how much interest you pay in the process.

If you can shuffle the debt around, transferring from the higher to the lower interest cards, that will help. And obviously if you can raise a bit of extra cash, maybe by selling stuff on ebay or a carboot sale, then that will help too.

Good luck

chimmers

Thanks guys, I'll sit down tonight and do the things you've said. A loan is a big commitment and one that I don't want to be stuck with if I fall on harder times, so perhaps being a card tart is the way to go! I used Martin's Budget Calculator earlier and came off as I thought I would - basically everything that comes in every month goes out, save for around £100.

Does anyone know how you go about turning down the loan - I assume when the documents arrive you just don't sign them and that's it, or is there more to it?

Seaxwyn

Just don't sign and return the forms. I've done that more than once and there's never been a problem.

chimmers

Great, thanks for that!

chimmers

Okay I decided the credit card tarting route was the best, I'll tear up the Asda loan paperwork when it comes. I've just been approved for the Virgin credit card which is 0% on balance transfers for the next 15 months, hopefully that will give me a better chance of catching up with my interest...

poorandindenial

Use the snowball calculator at https://www.whatsthecost.com to see the impact of different loan/cards/overpayment scenarios. There is also a tool at https://www.makesenseofcards.com that will show you what you can save by switching to different low life of balance or 0% interest cards

southernscouser

chimmers wrote: »

Please bear in mind that I'm a complete debt noob so if you could keep jargon to a minimum that would be great thanks!

Welcome to DFW and well done on your LBM. It's important we see your SOA and don't forget to include all APR's. After that you can work out your DFD from whatsthecost. Do you have an OH? Or a DH?

Anyway, I've tried to keep it simple for you as I know it can be a bit confusing.

Buffythedebtslayer

:rotfl:

southernscouser wrote: »

Welcome to DFW and well done on your LBM. It's important we see your SOA and don't forget to include all APR's. After that you can work out your DFD from whatsthecost. Do you have an OH? Or a DH?

Anyway, I've tried to keep it simple for you as I know it can be a bit confusing.

SS you are a meanie. :rotfl: please note normally he is one of the best people round here to listen to re debts and what not

Chimmers, just in case although I am sure you can figure them out

SOA - as some one said - statement of affairs, all incomings and out goings.
DFW - debt free wannabe
LBM - Light bulb moment

APR - annual percentage rate ( I think)
DFD- debt free date

OH - other half.... don't know what DH is ? ?


I would go with what everyone says - loans just mean more loans! Card tarting here you come

good luck
xxx