Should I get a loan?

[Needsomebloodyperspective]

I’ve managed to rack up about £6k on two interest free credit cards. However it’s now making me nervous. I want the cards gone.

ive been pre-approved for a loan at a rate of 7.8% to clear the debt and would be paying it back at £118 a month over six years. It would definitely be more manageable to get rid of them. Would you do the same? I have no other debts.

How many months have you got left on the 0% credit cards? 7.8% is high.

Got about a year left on each. I won’t clear them in a year.

When do the credit cards become interest bearing?
Are you strict enough with yourself to cut up your credit cards and not use them at all (whether you take the loan or not you need to do this!)

If you can pay the 6 k off before you are charged any interest then do that and don’t take the loan. If after a few months you will be charged interest on the card balances then take the loan (as credit card interest rates are typically much higher than 7.8 %). Or is it a half way house… can you (eg) pay £2k off the cards before you get charged interest and only get a 4k loan.

Get a loan in about 8 months

Why don’t you pay £118 a month on the cards until the 0% is up and hen get a smaller loan?

one card is cut up, the other is stashed away for emergency use.

That seems crazy. Chuck as much as you can until the IF period runs out then look at options.

Why would you pay 7.8% on a loan when you could keep in on the credit cards for another year and not pay any interest? Why do you feel better about a loan than a credit card? It makes no financial sense.

Keep the credit cards and pay off as much as you can each month. See if you can get more interest free credit cards in a year and keep paying off. You really need to be making more money though to both pay this off and ensure you don't need to put more on credit in the future. Is that possible?

If you switch to the loan you will have to pay around £450 in interest in the first year. Why do that when you can keep in on the CC's and pay none?

No, I wouldn't get a loan if I could avoid it. What advantage do you see from swapping the debt from credit cards to a loan?

Pay the minimum plus £1 per month off each card and then at the end of the interest term, look for another 0% offer. Some of them have lower minimum payments, so that's something to look out for if you're struggling.

Also see if you can cut other expenses like mobile phone, broadband, subscriptions or even food if you're currently spending above average, to free up money to pay the cards down faster.