is this a good way to pay credit cards?

[hercules]

We have applied for an advance on our mortgage to consolidate our credit cards. It will reduce our monthly payments by two thirds although is spread over 23 years so although the intrest rate os lower then the credid cards we would actually ebd up paying far more in the end.
In a few months we will be able to put far more intop paying the advance loan so will be able gto pay it off within 3 years.
By keeping the credit cards we seem to just use them each month and get nowhere in paying them off. We wont need them in a month anyway but the lowetr interest rate of the loan seems much better.
Are we doing the right thing or is there known problems with getting such a loan?
We cant get betterdeals on our cc due to poor credit rating.

tia

This seems like a good Idea to me, try to pay a bit more off your mortgage each month than they actually ask for (just round up to the next £10 or £15) and it will pay it all off much more quickly than you would imagine.

Just one thing tho. It is sooooo easy to build up a balance again on your credit cards. Promise yourself that you won't put ANYTHING on the cards that you can't pay up IN FULL when the bill comes.

Believe me they will bechopped. We only used them to get us through uni not for luxeries so i'm not worried about using them. Our income will soon be higher then our outgoings.

Another link for you, herc!

Try The Motley Fool Get out of Debt Centre . They also have a discussion board on the same topic where you can post questions like yours and get loads of knowledgeable people helping you -- a kind of mumsnet for money.

hth

I believe the best advice is never, no matter how bad the situation should you make an unsecured loan/debt i.e. credit cards a secured loan/debt.

Once the financial institutions have you in a secured deal it is to their benefit, not yours. With an unsecured debt you have other options. (I am sure I heard this from Alvin Hall on one of his programmes.)

just bumpimg

Can you not refinance them onto 0% cards instead? I agree it is better to have unsecured debt. What if you faced redundancy and all your payments were mortgage ones? At least you can negotiate settlement with credit card cos without losing your house.

Thanks cd. Both dh and I have very secure jobs and the minimum payments are only £90 a month although we will pay far more in order to pay off in about 3 years We dont have a good credit rating and have quite a large amount amount on credit cards so cant get the better deals.
The papers have come to sign which is why i've bumped.

your credit rating can't be too bad if you are being offered a sec loan, o% transfer to a new card would be better and you could cut the new card up when you receive it . Imo this would be the best deal.
If you are taking a sec loan make sure you can pay extra off at whatever amount suits you, a lot are just set up to recieve a monthly direct debit and may not necessarily have this facility.

We have tried before but were refused.
When I first spoke to my morgtgage bank they said they dont usually do a credit check and they aare working it out on dh's wage as it wasnt taken into account when working out the mortgage.
Tbh if rthe worst thing happened we wouldnt be able to pay ther mortgage never mibd the olan so would lose the house anyway. We could get by on one wage if one of us lost their job by getting this loan until another job was found and still pay it. It means that if we are short one month the we can just pay the min.
I am just concerned that this is not like an ocean finance con which we discover only later when its too late.

You can always try another provider to make sure, I work for a bank ( on mat leave ) and we always do credit checks for new lending - for existing customers. So their way of working sounds rather odd and not best for the customer imo.Good luck anyway

hercules - have you just tried once to move to a 0% credit card? Sometimes one place will turn you down - but another will except you.
I think if you overpay the mortgage to pay this extra loan off then it is ok - but realistically will you? Me a dh always used to do things like this - but never actually paid debts off quick - and often when you consolidate like this it is very easy to run up credit cards again - so you are left with the loan and a new credit card debit.
So if you do it then close all creadit cards straight away.
What I think - if you do take on this loan set up a direct debit into your mortgage of a regular overpayment to pay the debt off in a regular amount - not the 23 years they give you.
good luck! I hate credit cards - have two and looking to chop them up now!

Hercules - try Mint, and virgin 0% credit cards. You can apply for both online, and as they are newish they are desperate to get business and will often be more generous on the credit scoring. And you get an instantaneous decision.

hercules, if you look on the Fool website recommeded by Paula71 you will see that they all agree never never never to go down this route. If you have a day or two to hold off signing, it would be worth your while to go on there and read through posts, and possibly post your statement of affairs. Loads of people will come back to you with advice.

Unless you have one of those flexible mortgages, overpayments under about £500 won't be counted until the end of the year - so they get the money but you get no interest on it, or deduction from your mortgage debt until then.

If yours is flexible that's OK, if not it would be a better idea to pay any spare cash into savings (eg ING on-line) and then make one capital payment at the end of the year.

Capital One Platinum currently are offering 3.9% fixed on balance transfers for the life of the transfer.

Thjanks for messages. I have looked at the suggested website and posted my circumstances. The interest rate is 6.19 for the loan and we will be able to pay it off in 5 years by paying £260 a month. I know this is the same payment every month but we have already changed our circumstances as suggested on motley crew. Our problem is that we have had several late payments last year whilst dh was out of work and recently when i was on maternity leave.
We cannot pay them this month as i dont get paid until end of june and the cards wont wait thuis long. I dont want to have any thing else on our credit record and getting t5he loan would be far sooner.
I understand the problem of getting such a loan if you cant repay it but we will be able to and dont need to use the creditcards and they will be closed.
It's just a big step to take...