Repaying Debt

[Hadleyiam]

Morning everyone, my OH has come to me this morning regarding her credit card which she is making repayments on but it doesn't seem to be going down due to the interest.

Am I right in thinking the best way to go around this would be to take out a bank loan for a lower APR and pay off the credit card, then just repay the bank loan as soon as possible?

I have a few pieces of debt but they are on 0% apr so theres no immediate rush to clear them.

Any advice would be great

[Fonzey]

If she's making minimum payments (or close to) then yeah she's not going to make any noticeable progress into the debt itself.

Lowering the interest rates would help, as would raising the payments - preferably, do both. If she can get a promotional card with a 0% balance transfer (usually with a 2-3% fee for doing so) then that would really help, but depending on her credit reputation that may not be achievable.

It's possible to bounce around between 0% deals until the debt is cleared, but some cards now are offering 2years (maybe more?) interest free period so you can at least take a massive chunk out of the debt. It's key though that spending on the card stops dead, as 0% transfer cards rarely have good spending rates.

Edited by Fonzey on Tuesday 5th November 09:44

[Hadleyiam]

Hi Fonzey, thanks for the info, the debt isnt for a car, it was from when we moved into out first home and most the essentials went onto it.

The debt is around £1700 if that helps in anyway

[Fonzey]

Hadleyiam said:

Hi Fonzey, thanks for the info, the debt isnt for a car, it was from when we moved into out first home and most the essentials went onto it.

The debt is around £1700 if that helps in anyway

Sorry yeah I didn't mean "car", should have been "card".

[servantleader]

Have a look at Martin Lewis's site - there are a couple of 0% balance transfer cards offering no fee for 20 months at the moment.

[p4cks]

A balance transfer credit card should work if she wants to see the actual balance reduce when making payments. As long as she doesn't start spending on it and she sets herself a reminder for when the 0% period ends to do the same again, she can effectively forget about it

[Hadleyiam]

No problem, yeah nothing has been spent on it for a while now, will have a look for other cards offering 0% for x amount of time and see about transferring it, better to take the small hit on moving it and saving on the interest rate