Consolidating debt


I HAVE about £5,000 on three credit cards and a £6,000 loan. I have been given a settlement figure for the loan of £5,500 six months into it. Shall I continue to pay off the loan and get another to consolidate the credit card debt, or shall I get one large loan to consolidate the lot? BU, Chester

Darius McDermott at Chelsea Financial Services says: It depends on how much interest you are paying. However, the best option is to find a credit card provider that allows you to consolidate all three credit cards and your loan onto one interest-free card.

There are many interest free credit cards on offer. Most interest-free credit cards keep their status for a maximum of six months, and then revert to their normal terms of interest, so it is worth transferring again at the end of the six month term to another interest-free provider. It is your prerogative to change credit card providers as often as you like to maintain the interest-free status of your debt.

Egg, First Direct, MBNA and NatWest currently offer 0% interest. Check with the provider as to whether you can consolidate both the credit card debt and the loan. Consolidating your debt onto one interest-free credit card should reduce your monthly payments and make the debt easier to manage.

Consolidating debt

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