Supposing you owed £6k on a credit card. What would be the best way to deal with it?

[chocolatemousse]

After cutting up the card.

And assuming the monthly budget is very tight?

Depends - what is your income - is it regular (albeit tight).

Personally I would first of all look at any cutbacks in budget I could make for two years. Then I would take out a low rate personal loan for the period and pay it off.

Unless you can get an interest free transfer period (very unlikely these days) watch out for transfer fees etc if you are looking at this. Often personal loans can be much lower.

either be really strict ith yourself and pay off double the minimum amount every month of you can actually afford it - or pay lump sums extra when you can afford it - or if you are really broke then consider negotiating it down. But if you do that you need to be very strict and set out an income and expenditure sheet to work out what you can afford. it will mess up your credit rating. my advice is go to CAB and see a money adviser they are excellent DO NOT GO TO ONE OF THE CREDIT PEOPLE WHO ADVERTISE

and look at moneysavingexpert

If you are really going to struggle to pay even the minimum each month, go to CCCS

They will negotiate a deal with the credit card, where they stop charging you any more interest, and you pay the most you can afford each month until it's paid off.

If you have any other debts that are causing you probs they can be rolled in as well. DD2 did this last year and it's been a huge help.

Good luck

agree ww or cab. to get the payments affordable you need help to negotiate in my experience (10 years as a debt adviser many years ago!)

No, minimum payments are do-able. I just know that's not a sensible way to pay it off.

Credit rating fine so personal loan might be an option. I want there to be a definite end to it iykwim?

I second Ska that Martin Lewis's moneysaving expert is a great site full of good advice.

link

Minimum payments are a crap way to do it though, cm - you pay a huge extra amount back that way - pleeeease talk to CCCS before you even think about taking out a personal loan.

(The only possible drawback to the CCCS route is that you would then prob not be able to take out any further finance until this one is paid off - would that be a problem?)

Well ww, we were planning on a new car in just under 2 years.

Not life or death though!

dh read an article recently that said banks are about to introduce a late payment on credit cards an unsecured loan wil be charge against your mortgage if you have one.

I don't understand the ins and outs of it but I would continue to make the minimum payments unti you come up with a better idea

I'm almost sure there's a recent TV ad on one credit card giving 14 months @ 0% I believe, but you'd have to pay something like £430 pcm to clear it within that 14 months(assuming my babybrain has worked the sums out). Even if you have to pay a fee, you'd most likely be quids in if you made sure you paid it off within that timescale. Personal loans are not the best way forward usually, as you will pay quite a large interest rate on such a (relatively)small amount.
Good luck sorting it out chocolatemousse.

CM really really advise you to get free professional advice. you may well be able to sort it out but taking on extra debt to pay off a debt doesn't usually make sense. min payments just get you to pay more interest. that's why paying double is a good way to start but clearing it quickly is hard work. do look at moneysavingexpert and also cab websitehere

Don't do the laon route if you can help it, DH and a friend of mine learnt the hard way that the interest was a lot cheaper on paying back the CC

Something I found helpful in paying of my cc debt was to have two current accounts - one that pay went into and all bills went out of and a second that I transfered a living allowance to, covering food, clothes, spends.

Then you can put all your payments on direct debit so that no payments are ever late - including the CC so you wont get hit with late fees or bad credit rating.

Set a living budget - Alivn Hall's, "Your money or your life" book has a good guide to doing this - it involves keeping a spending diary for a month so you can see where you can make cut backs.

This means any money left in the bills account can be transfered over to the CC to help pay off the debt.

I agree with the others, you do need to be paying more than the minimum payment, especially if the interest rate is high.
I had a card where the minimum payment was less than the interest charged each month so I would technically have never paid the card off.

It is worth trying to get to grip with interest rates on cards and loans as well as fees before you make decisions about moving cards or loans, sometimes it just doesn't work out any cheaper.

Also don't be pressured into taking out payment protection - it is a waste of money.

Hope you find a clear route out of this.