Overdraft and zero % credit cards

warrior1960 · 13 April 2017 at 3:10PM

Hi. Due to being out of work for over 3 weeks in February, I lost just over £1000 of what I would have had if I had continued working. I've been back in work for several weeks but the period out has put a hole in our household finances and our overdraft is now around £2300.

We currently have an MBNA credit card at %, which was largely used to pay towards my daughter's wedding last October. We've got about another £3000 left on that one. I hate being overdrawn and have wondered about taking out another % credit card, or even 2, to clear the overdraft and reschedule our income and outgoings. If there is one thing we do have, it's a very high level of equity in our house.

I would welcome any suggestions if more % credit cards are the route to go, or maybe a consolidating loan at the best deal, or even doing a re-mortgage (we've about £40K left on it). The one problem I've found it difficult to get out of in the last 5 years is temporary employment contracts. I've been able to get work most of that time due to my experience and qualifications, but pay can vary.

warrior1960 · 13 April 2017 at 3:16PM

Oops, spot the mistake! I meant to say zero % credit cards in case you were wondering.

enjoyyourshoes · 13 April 2017 at 3:20PM

Hi

have you a plan to clear £3K to zero just before the 0% period finishes?

If yes and it 100% fool proof then consider taking another 0% with a similar plan to pay off totally before the 0% period finishes as post offer the rates hike.

If no then consider throwing as much at OD (as charges, daily/weekly fees & interest are crippling) i.e. spend ;less remover luxuries and treats (Fags, booze, mags, lotto, latte's, meals out, you get the drift, and put into OD then the 0%.

GazNicki · 13 April 2017 at 3:24PM

I wouldn't be looking to shift the debt from unsecured over to secured debt. Your mortgage provider will also not allow you to do that anyway, so forget the idea of a remortgage as that is out of the question without committing some kind of fraud.

In terms of a consolodating loan, if secured, is not always the best route to go either. It may feel like you are giving yourself some breathing room as you shift multiple debts into one manageable payment, but a single default on that debt can become catastrophic.

Keeping them unsecured is the best bet.

When did you last check your credit reports?
Do you check your reports on all 3 of the reporting companies?

You could look at using the CreditClub on here to soft-search your availability for a 0% card deal and see what that says. Shifting debt onto 0% cards is the best way in reality if you want to get your debt in order.

However, if you have space on one of your exisiting cards, you could contact the card issuer to ask if they can offer you a 0% deal including a Transfer to Account deal. This would allow you to shift the overdraft debt onto the card at 0%. This could be a better start to it, as you are not conducting hard searches on your file.

Given your work isn't as steady as it could be, securing the debts on your house should really be a no no. It red flagged for me, it certainly will for any credit company.

warrior1960 · 13 April 2017 at 4:18PM

Thanks, that's very helpful. Given me food for thought!

Overdraft and zero % credit cards

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