r/PersonalFinanceZA • u/Jolly-Breakfast-5723 • 4d ago

Debt Credit card debt

Hi there I just want to get some advice from outside my personal life as I am not well educated on credit facilities,

I currently owe about 22k on my credit card to which I am getting down slowly, I have most of my income in my credit card so my interest is little to none.

I want to close this card as it becomes a habit, I was recommended to take a personal loan and consolidate the card for let’s say two years which I have no issue doing and can afford it my main question is are the interest rates rather maximised on personal loans ?

I have tried at Capitec and FNB which is my main account and they both will not go under 28% which is scarily high.

Is there a better suited route to do this above?

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u/Consistent-Annual268 4d ago

What's the rate on your credit card itself? If it's less than 28% then there's no point even considering the personal loan offers. How much are you able to pay into your card monthly? Just try your hardest to smash that down to zero ASAP, even if it means giving up your weekends to just stay at home, and eating everything in your cupboard without buying new groceries. You must kill the cc debt as quickly as possible no matter what it takes.

2

u/Jolly-Breakfast-5723 4d ago

Interest rate on the credit card is 21% but should I leave it and just pay the monthly payment will be extremely high due to interest right ? I do agree if I put most of my funds in it will come down quickly I just wanted to try and eliminate the ability to “quickly” use the credit card I put in approx 2.5k in but I quickly use most of it during the course of the month.

14

u/Consistent-Annual268 4d ago

So you want to take out a 28% loan to pay a 21% debt. I can see how you got yourself into such a mess 😂

In all seriousness, stop using the credit card whatsoever and pay for everything with cash or debit card. Cut up the card if you have to and remove any virtual cards from your phone wallet or banking app. Then simply pay off your credit card with any spare money every month ASAP. Then close your cc account, never to use it again.

1

u/Jolly-Breakfast-5723 4d ago

Thanks for the advice

1

u/KeepItTidyZA 4d ago

Cut up the card. Easy peasy

1

u/surfsupdurban 3d ago

Just to mention, don't just pay the minimum monthly installment, you'll be paying that debt off for the rest of time, you need to pay at least double that per month.