Why we're dicing with debt
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Step 3: Find a low-rate card
Credit card customers who carry a balance on their card for many months need to shop to make sure they’re getting the best deal they can.
There are still cards which offer 0% on balance transfers for 12 months or more, including Virgin, Barclays Platinum, Tesco Bonus, MBNA Platinum and Halifax One amongst others - 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 about paying off your debts, consider taking out a personal loan. There are a number of loans with interest rates just over 6% for borrowers who meet the lending criteria. Use comparison websites, such as moneysupermarket.com, to seek out the best deals. It could also 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 onto a mortgage, only to run up yet more consumer debt on your credit cards.
