u shld pay maximum payment everymth instead of minimum payment to cc. By doing this, even w/o balance transfer u also can settle the outstanding every soon.

I did it 2 yrs ago n manage to settle RM10k cc balance in 6 mth w/o balance transfer. But everymth when u calculate d interest earned by bank, it's really hurt...!

some time balance transfer is u dig a new hole to cover the old hole.... it will nvr ending if u can't control on ur cc usage.

@vicng,
Take out the personal loan to cover CC hole and then stop using CC and start paying off the personal loan That way, can save some $ in bank interest especially since Credit Card interests are v high

he can always do credit transfer ... RHB intro the reducing interest which is better than he pay the minimum payment everymonth

yes, im one of them but i have my solid reason... til today not yet settle

AKPK...
it really helps...ur fren will need to attend some counselling sessions n then they will come up with a plan
usually they will recommend u to settle the debts installment basis...not sure if there is interest or not...
but i noe someone who actually attended the sessions n it helped her a lot

well, it really depends on whether your friend can pay the minimum payments AND other loans (car, house) or not "punctually" NOW before further going on .....

Let's say he still pay the minimum payments punctually every month, i would suggest him to take Personal loan (and or balance transfer if he still have cc with empty limit). For ploan aplication, payment history is very important. Banks will not have the confidence to lend you money if you are not paying promptly. If you have high commitments (a lot cc, car loans, house loans to pay), better choose bank that can consolidate all your CREDIT CARDS-balances-into-one type of Personal loan. 2 benefits: might get lower interest than normal aplication and higher chance to get approval.

Another option is to refinance house if your fren can do so. then, he can get a lower interest rate compare to ploan.

Let's say if ur fren cannot even manage to pay promptly, i would really advice him to discuss w the banks before get blacklisted, convert to term loan at lower interest and longer repayment period. Or if your fren's wife has a good payment record, can ask her to get ploan......

After resolving the current debts issue, would strongly advice your friend to cut the NOs of CC he has. The more cards he has, the harder for him to control the spending habits. Use how much, pay how much. Not think twice but think 10x b4 you swap your card. Pay b4 due date to advoid late paymet penalty. If not, the same problems will occur again and again.

take loan from ur insurance company policy

Don't ever take personal loan to offset credit card charges. It is more expensive that way and you can easily know by doing simple maths.

haha...I think it's the opposite.
It's simple maths that misled them to think that it's feasible.
The comparison between 18% per annum against 12-14% per annum is enough to create the illusion.

@clawhammer,
Y do U say so since interest rates are much lower on personal loans than Credit Card loans?

He's implying the opposite as one never compared the effective interest rate charged.

I pay the full balance of my credit card at the end of each cycle. I pay most of my purchases eg petrol, groceries and bills with cc and do not spend unnecessarily. In a way, it helps me keep track of all my spending at the end of each month when the statement comes. That's how I manage and keep track of my monthly spending

TS,

Your friend is one of the many who has credit card debt. First of all, your friend really need to sit down and concentrate on financial planning, before he started anything, ask him to set a goals to clear the debt, for example to clear the debt in 1 or 2 years, always pay more than minimun payment. Secondly, ask him to go shop for a balance transfer credit card that has lower interest rate or get a personal loan with lower interest rate. Thirdly, he need to start doing budgeting for every month to track where the money goes and spend wisely. The ultimate goals here is to spend lesser than he earn. No turn around to it.

Lastly, it's all depend on self-discipline, no matter how perfect the plan is, without discipline the plan will not go further.

i never let bank earn money from my credit card payment cos i settled full for each month...no more outstanding balance left..

if u really suffer lot, then can try apply personal loan from Citibank which is the lowest interest rate that is offered nowadays, I think the annual interest rate is 7.6%, so monthly only 0.63% while credit card interest is 1.5%

LOL, I'm starting to have doubts if you really know about banking and financials. That is the reason why we have people getting confused and go for Personal Loan thinking it's a lot cheaper than credit card. Do you know how interest rate is calculated between Credit cards and personal loan? Can you also please do some research and talk based on facts?

This is starting to get tiring.

---

Added on June 13, 2008, 5:10 pmFirstly, understand how interest rate is calculated between the two. A better solution is to do balance transfers to get lower interest rate, not personal loans.

This post has been edited by clawhammer: Jun 13 2008, 05:10 PM

@clawhammer,
Admittedly, I've never taken a personal loan thus far; I don't know what other fees are required other than interest rates and alwiz thought interest rate p.a was much lower than that of CC interest rates hence my suggestion.

It does look like I've got to get more information before I give wrong advice.

Personal Loan - work kinda like car loan. Let say 12% per year, your installment last for 5 years. Total interest is 60%. They calculate the interest upfront, only certain bank calculate with reducing interest.

Credit Card - Interest is calculate under reducing interest. That why, if you could afford to pay minimum payment, it's advisable to pay to CC rather than apply personal loan.

Take in mind, if you convert your debt to personal loan, usually CTOS will have the info. In future, hard to apply loan or card.

@SynHeng,
OoH.... so personal loan is on compounded basis?!

Yeah, and which part of "illusion" on the interest rate part which you do not understand here?
Which part of the sales pitch of 12% per annum vs 18% per annum is not misleading?
And you're getting personal on me?....wow....bravo!

Pls re-read my whole statement again:
It's simple maths that misled them to think that it's feasible.
The comparison between 18% per annum against 12-14% per annum is enough to create the illusion.
Than tell me again which did I mentioned is wrong.
Look at most of the personal loan thread in here and see how many are naive enough and think lightly about the lower interest rate charge instead of doing the real maths and say that the effective interest rate charged over the whole tenure is actually higher.

This is a prefect example:
This post has been edited by b00n: Jun 13 2008, 10:48 PM

I believe balance transfer will be a better choice for him. Now banks are desperate and will have all kinds of promotion for balance transfer. But of course one have be able to judge which one is the better choice. Personal loan interest rate is higher. Just my 2 cents.

@jasontoh,
I don't think the question here's about taking a balance transfer, it's more like personal loan vs credit card loan; which is better?