If your store card accounts are in arrears or heading into ‘persistent debt’, then we could help you resolve these and get your finances back on track. With a consolidation loan, you could stop interest rates and charges – leaving you with just one affordable monthly payment to make.
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Similar to many questions relating to financial matters, this answer depends on your circumstances. If you’re struggling to meet the repayments though and you have large amounts of store card debt, you probably have too many.
Another way to determine if you have too many store cards is to consider your credit utilization ratio. This is an indicator of how much credit you have available and – generally – it’s recommended to keep this at around 30%.
For example, if you have two store cards and one credit card, with £2,000 limits, the total amount of credit available to you would be £6,000. However, if you’ve used £3,000 of that, your credit utilization ratio would be 50%.
To determine whether debt consolidation is worth it for store cards, you should ensure you’re ultimately paying less than you otherwise would have done.
For example, one store card provider – once customers have passed the introductory period – charges interest rates of 29.9% APR. If you held several store cards, owing £500, £200, and £300 on each at similar rates, it would mean over two years you would repay a total of almost £1,300.
However, if you took out a £1,000 debt consolidation loan – at 12.9% APR – you would repay around £1,130 over the same period.
This also doesn’t take into consideration other debts which you might have. By combining all of these into one loan, you might find debt consolidation is certainly worth it.
Stop calls from creditors
Stop relying on others for money
Invoices easier to manage
Regain financial control
Have disposable income in your account
Keep track of your payments