Hi all,

This is my first time registering with this forum but I thought I'd post this and get some feedback

I currently owe 5000pounds on my credit card and the interest rates are getting out of control. I fell into the trap of 0% APR for 9 months etc but I lost my job right as the interest was kicking in so I couldn't transfer my large balance and now they're charging me over 100pounds per month as my minimum payment which is causing me to go over my limit and making things even more difficult.

Since I got confirmation of a new job I am going to take out an unsecured loan with my bank at 8% fixed rate and pay off my credit card immediately It will take 3 years to effectively pay off my credit card but god knows how long if I get sucked into keeping my credit card and paying these outrageous interest charges that are nothing short of criminal. It seems at every turn there is interest, fees and charges.

What do you think of my strategy? I was originally going to transfer to yet another 0% APR card for 13 months but that will just compound the problem and it will take me so long to pay off the card. If I take out the loan it will take me 3 years with each payment around 150 pounds per month. On 5000pounds I'll be paying back 620pounds in interest over 3 years. I don't use my MBNA card for purchases so I think it's time to take this route and get it paid off for good before it cripples me.

Comments welcome thank you!

Let me get this straight - you owe 5 grand on your credit card, so you're looking to take out an unsecured loan to pay off that debt outright at a lower rate of interest?

If so, I think you're definitely on the right track - the fact that you're paying off your credit card in full should be helpful to your credit rating, but more importantly, the fact that the loan repayment rate is lower should definitely help control the debt and make it easier to control.

Just ensure the card is fully paid, then consider destroying it - when someone feels their debt is coming under control, it's far too easy to feel complacent and start using your card again - compounding the debt issue.

If you're looking for sources of loans, Northern Rock and Alliance & Leicester apparently have some good unsecured loan rates, though I'm not sure if Northern Rock is in a position to lend at present.

Anyway, best of luck with it.

I think it is ok to take out the loan and pay-off your credit card with one payment especially if the interest which you will pay on your loan from your bank will be smaller then what the CC will charge you (most likely it will be).

Once you pay off your credit card make sure you will use your card in a smart way otherwise you could face the same situation again.

If you use your CC it is always a good idea to pay off your balance at the end of the month (or at least during the almost two months that many cards offer for repayment without charging interest).

I would also recommend to make purchases which you can afford and not to buy anything which will require more then three payments.

I would not recommend to get a loan from Northern Rock as their future is very uncertain. Most banks do not show any interest in 'saving' the bank. Stay away from it, there are plenty of other banks...shop around to get the best possible rate.

I think you're definitely on the right track,it is ok take out the loan and pay off your credit card.