Running Credit Card balance V Loan

D

Dualtha

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Hi,

I have a credit card amount owing to 5k as I have just bought a house and used it for bits and bobs. I pay 400 + a month off the balance and was just wondering what is best way to continue paying this. Would it:

A) Be better to continue to pay the 400 + off a month for th year until it is cleared or

B) Take out a personal loan over 3 years say costing only 157.95 roughly a month and use this to clear the credit card. I will then have more disposable income monthly.

What do people advise?

Ta
 
You will almost certainly save on interest charges by taking out a personal loan, as the APR on a loan should be around 6% to 8%, whereas the APR on your credit card is probably around 18%. However, there is a risk that you will let your CC debts build up again, and then you'll be facing 10k of debt.

What APR are you paying on your credit card?
 
I normally never use my credit card so running up that amount is very unlikely. Just needed to use it as emergency cash to get household necessities. My APR is currently 14.25 with AIB.
 
If you can afford €400 per month to pay against your card. Then take out a loan over 1 year instead of 3, and put the €400 towards that.

The enemy of a low APR is a long repayment term. Which is why ads on TV are happy to tell you how much they can save you in your monthly bill, but they don't tell you (as prominantly) the overall interest you'll pay over the live of the loan.

Also if you take out a loan get a Variable Rate so you are not penalised for paying early.

-Rd
 
Bank of Ireland are offering a 2.9% apr for balance transfers for the first year [broken link removed]
That's as close to free money as you're likely to get given inflation is 3%. There may be stamp duty implications for you though
 
Why don't you transfer to an Ulster bank credit card ? 0% for 9 months. Pay off 400 per mont for 9 months and you're down to 1,400 balance at end of term. Then transfer the 1,400 to an AIB for 6 months at 0%. Pay it off with no interest!
 
Bear in mind that some or all 0% balance transfers involve normal high rates of interest on any subsequent transactions executed on the card while any of the transferred balance is outstanding. Check the detailed terms & conditions to make sure you know the score.
 
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