Loan or credit card - advise needed

[mummytopebs]

Ok so we have got in a bit of debt for a variety of reasons mainly due to me having to cut working hours cos dd has had a lot of health problems. We have now a lot on credit cards (most of it interest free), we are now in a position to start to pay these back. The problem is i am wondering wether to put them on an additional loan i have as then i have to pay the set amount each month which would take 7 year in total to pay back or keep paying a loan i have and the cc-the only problem with this is i am not tied to paying a specific amount each month (ie christmas/birthdays) and sometimes think i wont pay as much this month. I just want to get out of debt. Any advice?

You need to go and see the CAB and take all your stuff with you. They can help you more then MN.

Have you tried the money saving expert site with martin lewis hes great I use the site all the time.... I know he always say that if you can get 0% intrest on a credit card then thats better than a loan and the virgin creadit card is offering 16months 0% at the mo dont know how easy it is to get one then you just need to keep up the min payments and then keep swaping cards when the 0% runs out...... Oh and set youself a min amount each month to pay off the cards and stick to it all on one card if you can

We have just got a virgin one with the 0%, suppose its obvious really think i will set up a standing order to pay off set amount each month. Scrooged i dont feel my situation is bad enough for cab, we are in debt but can still meet payments at the moment anyway

just be careful cos if you are not ORGANISED about ensuring you dont change/pay off your zero percent credit card option when it runs out it will suddenly shoot up toh anything between 15 -29%.

bankloan rates should be very low just now, so not a bad option. depends how fastidious you are about arrangements.

If you cannot ommit to a set min payment for a loan then you need to carry on with the credit cards, to miss a payment would damage your credit rating.

Attack the card where the 0% expires first and pay off as much as possible. Where possible also set the min payment on your other cards to the min you currently pay. This way you will be paying off a little extra every time and if you can meet the min payment then its not problem ie

mth 1 min payment £100 pay £100
mth 2 min payment £95 pay £100
mth 3 min payment £90 pay £100
mth 4 min payment £85 pay £100

This is not a real life eg but you get the point, this way you will be treating it as loan ie fixed payment but if for any reason you really can't do the set amount you can pay the min for one month. You will be paying less interest and whilst it may seem like a small amout it soon adds up.

It takes about 7 years to pay off £1000 only using the min payment and this is becuase the min payment covers the int and very little of the debt by fixing the payment you are increasing the amount of debt you are paying off.

If you can keep your credit card debt interest free by card switching it would be better to pay off your loan early - or pay into a building society account, earning interest, and pay the credit card debt down when the interest free period ends. Always reduce debts paying interest first.

However you have to be very disciplined to do that. Otherwise pay off the one where the interest free period ends first.