Seven steps to control your debt
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Step 3: Find a low-rate card
More than four million credit card holders still hadn’t paid off their Christmas 2005 spending in December 2006 - a trend which seems set to continue into 2007. Credit card customers who carry a balance on their card for many months should shop around to find the best value plastic.
There are still cards which offer 0% on balance transfers for 12 months including MBNA Platinum, Barclaycard, Virgin, Halifax One card and Citi Platinum - although all these cards do charge a balance transfer fee. Once you’ve moved your balance to one low-rate card, cut up the rest of your plastic to prevent yourself building up any more debt.
dealing with debt
Step 4: Consider a loan or remortgage
To be more disciplined in paying off your debts consider taking out a personal loan. There are a number of loans with interest rates between 5.9% and 6.5% for borrowers who meet the lending criteria. Use comparison websites, such as moneysupermarket.com, to seek out the best deals. It might make sense to consolidate card and loan debts on to your mortgage as the interest rate is usually much lower.
But remember, the danger of this is that you will be repaying the debt over a much longer period – for the term of the mortgage – so the total interest you will pay back will be higher. Also, don’t be tempted to consolidate card debts on to a mortgage only to then run up more consumer debt on your credit cards.
