I’m struggling to clear my credit card debt
Q I WANT to try to clear some credit card debt I have built up. The interest rate is high and it will take me forever. I have been turned down for a 0% balance transfer card and wonder if I should keep applying until I find one I’m accepted for?
A IT’S not a good idea to keep applying for credit as it will leave a footprint on your credit file and could reduce your score, putting lenders off giving you access to products.
You can do a “soft search” that lets you check your eligibility for products before you apply formally.
There are tools to check eligibility at moneysupermarket.com, experian.co.uk and totallymoney.com.
Financial firms such as Barclaycard and MBNA offer pre-eligibity checks.
Q I’M on an interest-only mortgage and have four years left on my deal. I’ve been making savings over the past few months from not spending as much on clothes and socialising.
I’d like to try to sort this debt out and get on track to clear it when I retire. Will I be able to switch part of it to a repayment during the remaining term?
A IT will depend on your lender – some do offer this facility mid-term so it is worth contacting them to find out your options.
If you are not able to do this without a penalty because you are mid-term, you can overpay each month or repay a lump sum without any penalty. Typically, mortgage lenders will allow you to overpay by 10% of your outstanding balance each year. This will mean you can reduce the capital you owe.
Q I’VE found out I have a deferred works pension. What is this and do I need to do anything?
A THIS is a pension you have stopped paying into, but you have not yet retired or started receiving any benefit from the scheme.
If it’s a private sector scheme it will be possible to transfer the fund or cash it in. But you need to ensure you fully understand what guaranteed benefits you may be giving up – some schemes offer a guaranteed income based on earnings and length of service.
And be very wary if you transfer it – make sure you fully check any new potential scheme to ensure it is an official one and not a scam.
Q MY partner and I own our property as tenants in common in a property trust. Upon death I think each share is split between our adult children. But what happens on the first death?
A ON the first death that share of the property simply falls into the trust. The surviving spouse can remain in the property until his or her death. However, the property must be maintained and kept in good repair.