Credit card advice

[Andeh13]

Bit of a shot in the dark but figured it was worth a shot. My girlfriends Mum has £1000 with one of her credit cards and is looking to do a balance transfer to one with 0% to avoid the fees she is paying atm. As she is currently paying about £60 in a month, but half going to cover

She doesn't have the best credit rating, and has already been turned down by Virgin Cards, though this may be down to her having phone & internet with them, and having missed a few payments in the last year.


As she cant just keep trying random cards & getting turned down, can anyone advise on any card companies that might be a bit more lenient on people with below par credit ratings, who still offer 0% for several months+?


many thanks guys

[TheAnimus]

so 0% APR for low credit scores.

No chance.

She might be better off going to her bank, agreeing a re-payment loan with them.

[Unique]

when you miss payments with big companies like virgin, you get marks on your credit score, and this makes it difficult to get more credit. if you apply for loans or cards and get knocked back, it also affects your score, so if you keep on applying for cards and getting knocked back it will just make your credit score worse. the score is what companies check to decide if you should get credit or not

if she has been with her bank for a while she might be able to get a loan to repay over 12 months or so, but this will probably be at about 10% to 15% interest for such a low amount

the companies that are more lenient tend to charge higher interest rates as they are taking a higher risk. the lower the risk, the better rates you can get

[Saracen]

I would think TheAnimus is right .... poor credit record and wanting a 0% deal .... in today's economic climate, little or no chance. Those deals are typically designed to poach good risk customers away from competitors.

A bank loan may well be the best bet, and though it'll cost in interest, it'll probably cost a lot less than financing it on the card.

However, I'd suggest cutting up the card once a loan clears it, or when money is tight, it's tempting to use it and before she knows where she is, she'll be owing money on the card again and paying off a loan. That way lies real trouble.

Or, cut up the card now. At least the balance won't get any bigger that way. And once it's cleared, she can get a replacement card, if she can justify it to herself and actually needs it.

Credit cards can be very useful and a great tool ... if you can afford to use them. But they can be a real curse if you can't, because they allow people to defer the problem and avoid dealing with it. Instead, you just stack up and compound the real problem, and it can get out of hand.

[mikemikemi]

Alternative, although similar to a loan, are credit cards that offer a lower rate for the life of the transferred balance. Probably looking ~7% v.s. ~17% on the current card.

I think barclays do one, but not sure how much the credit rating affects the application.

[Nick]

Don't forget that with each application she's driving her credit score lower.

Multiple searches registered from a variety of lenders show the applicant is scrabbling for funding... so that's taken into account and will temporarily drive the credit score down.

Best bet is a consolidation loan from the bank, drop all debts into it for one lower payment... but only if she's not already got one over about 10K.

[vicar]

Go for a bank loan its far cheaper.

[TheAnimus]

Sorry If i seemed harsh or un-sympathetic with my succinct first post.

No one really ever offered 0% APR enless they thought they would get it back. Normally this was via balance transfer 'fee' of 2.5% or there abouts. This was often roughly what the loan was costing them.

LIBOR or London InterBank Offer Rate is the guideline of what a bank pays to borrow money.

At the moment this is still very high, making lending expensive.

People are very worried that debtors will be defaulting on mass.

As such 0% offers will be reserved for only the very best score, used to suck in others more than anything else.

A bank that has access to her previous earnings and spendings can make a judgement with more information than most competitors would be bothered to process (its not worth loading a computer with 5 years of information, just to give a quote) so they are likely to be able to offer the best rate.

[Andeh13]

Thanks for all the replies guys, was a shot in the dark but figured worth a go. Ill speak to my girlfriend about possible loans & if that would work out cheaper for her mum but aside form that I don't think there is much more that can be done.

Thanks again

[Mossy]

The bank is the best option tbh they are always willing to help, there are cards out there for people with a low credit rating but the interest is silly, they promote it by saying it improves your credit score but imo people who look for these types of cards are usually the ones who can't really afford to pay them and end up in more trouble. It is never good to pay credit with credit but if you must refinance then the bank is the correct option. CC often offer 0% on balance transfers for the 1st 6 months standard this only shifts your debt and only offers a short term fix to your actual problem (which is affording the repayments) were as the bank can see your account and plan a repayment scheme you/they can afford.

[shaithis]

The best CC advise would be to ensure she only uses it when she has to in future, paying it off as soon as the statement arrives......and "has to" means that credit card is the only type of payment accepted. Putting stuff on CC because you can't actually afford it is a mugs game that gets a lot of people into trouble.

[Andeh13]

Just been speaking to the girlfriend and she ran a credit check for her Mum, to see what her rating is and if its worth trying again. It came back all 99% green, one missed payment in the year(only negative) and 999 as the number rating (out of 1000?).

Could it just be that because she has been late for a payment or two with the virgin TV that they don't want to risk her on anything else? Seems odd that the credit check (creditexpert.co.uk) came back so clean and she still got refused by Virgin.