And It Must Do Real Harm To Your Credit Rating?

Q: I am looking to get rid of my credit cards, I have seen many adverts for debt consolidation services, but surely these places make a profit on you, and It must do real harm to your credit rating? I was wondering if anyone could advise me whether it would be wiser to get a low interest loan (7.1% is the best I found) or go through a debt consolidator? The amount on all cards combined is about ??10,000.

A: Well, "thrill-seeker", the first step is to start spending less than your income. Otherwise, if you borrow more you are only storing up trouble for yourself. The first thing to do, therefore, is probably to cut up all your cards. Have you worked out your income and necessary expenditure? What margin if any have you got towards repayments? How many cards have you got? Any other debts you have problems with? Is the loan secured on property? Is 7.1% rate a true APR or a flat rate?

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