Some advice please on £5k credit card debt

[needbucks]

Hi there,

I would like your advice please on the best way to go about some debt that I have on my AA credit card and the best way for me to pay it off.

I currently owe £5k on the card and the min payment each month is £97, although I always pay more than that.

I've just gone onto maternity leave as I am expecting a baby any day now so will be on SMP for a while. My direct debits/standing orders will be come in at on average £100 per month (my husband will pay the rent and bills etc). So my SMP will probably be in the region of £500.

I am in a position at the moment where I could probably knock a good £1,500 to £2,000 off the credit card to get it down to £3k-£3.5K which I hope to do by the end of this month.

I've resisted doing searches for 0% credit card transfers for the last 4 months or so, just to give my credit history a bit of a break and I have kept up with all my credit card payment for 12 months +. My credit history the last time I checked with experian (last month) was around 792 (fair). I am aware that this isn't always gospel.

If I get myself into a position of having around 3k debt, do you think I would have more chance of being accepted for a 0% card or even a low rate credit card? Possibly even a low rate loan? Would the fact that I paid £2k off the card have a positive effect on my credit rating?

I am just trying to explore the possible avenues available and get some advice from you good people before doing any applications.


Many thanks x

[SXGuy]

Re: Some advice please on £5k credit card debt

Im not really sure whether people here will be able to advise you about the best way to pay off your debt or to apply for a credit card because to be honest, most of us are about not paying credit cards that are deemed unenforceable.

But, in my personal opinion, a 5k debt, is nothing, and the chance of you getting a 0% card would be the same whether it was 5k or 2k. I doubt it would make that much difference.

Most credit lenders are concerend with your ability to repay a debt, or whether you miss any payments, more so than the balance of debt you have, providing its not some crazy amount of debt.

[BBoo]

Re: Some advice please on £5k credit card debt

What will have a greater benefit on your credit rating than paying off a chunk of money, is the fact that you are building up a reliable repayment history.

I would go into this from the point of view that paying a chunk off your credit card is always a good thing to do anyway, as it means that much more of your monthly payment will be going towards paying off capital, and less towards interest charges. This will help you reduce the balance still further if you maintain your existing repayment levels. This in itself will help your credit history still further.

If you then get accepted for a 0% card, then all well and good, but the worst case scenario is still a good place to be.

[malamute]

Re: Some advice please on £5k credit card debt

From what I've read and seen on credit file info - there seems to be a calculation of available credit and used credit.

i.e. owing 5k on a 6k limit is worse that owing k on a 8k limit.

From that I'd (just my opinion) say paying off a chunk works in your favour and the following month (if interest is applicable) you'll owe interest the following month.

In the past I tried the "get a 0% and pay it off" but i kept the old one so started a viscious cycle - not suggesting that you're the same at all. Just a trap I fell into.

Its a tricky one but I guess it depends on your ultimate goal - pay it off asap, pay it off with minumum interest or just getting rid.

Sorry if that's a ramble - let s know how you get on

M