Using balance-transfer cards to help put an end to our debt troubles


So, I know that there’s a metric ton of personal-finance wisdom on these forums, and I’d like to ask for some of it! Here’s my situation:

The Background

My wife and I have been living in the south for many years, piling up debts (credit cards and short-term loans). Some of it is bad money management on our part (OK, a lot of it is), but some is just the expense of living in the south. In any case, in our mid-forties, we find ourselves with a high household income (about 94k), but unable to afford the deposit for own house and living every month trying to avoid finishing with our bank account in the red. A big portion of our income goes on credit card and loan repayments and interest. Especially interest.

The Plan: Phase 1

So, a couple of months ago, we both got jobs up north to put an end to our financial woes by escaping to a region with a more manageable cost of living. We knew that in the short term, this would leave us even worse off, and boy, it sure is.

We’re temporarily paying double rent (well, rent + hotel) because I’m up north, and the wife and little one are still down south until the end of the school year: wife is a school teacher and the little guy’s in school. This has caused my credit card debt to get even worse (I’m at about 11.5k on my cards now).

We’ll finally have the family moved up north by the end of July and go back to paying a single (and way lower) rent. But before then, my credit cards are still going to have to take some more strain: 1k for the move, another 1k for the deposit and about 700 for first month’s rent, plus 5k for a second car.

I know it might sound crazy to be looking at a second car in our situation, but repayments + insurance + maintenance + petrol works out to be about the same price as the train for commuting, and the second car allows us to live in a lower-rent area than if we had to live in an area within easy train-commuting distance of Manchester, where I work. [Note: we can’t escape the commute because my wife’s job is about 35 miles away from Manchester].

So by the time all this spending finishes, I’ll probably be at 19k credit card debt, or perhaps 14k + a new 5k loan taken out for the car (by my wife).

The Plan: Phase 2

Come August, when we’ve paid for the move and are no longer paying double rent, it’s finally time to start getting rid of all this expensive short-term debt. It might be over-ambitious, but we want to be debt-free, ready to start saving for a deposit and buy our own house, within 3 years. A big part of my plan is transferring as much as possible of my current credit card debt to low-fee balance-transfer cards, then setting up monthly payments to pay them off before the deal ends (about 3 years for most of the cards I can get). I’m guessing I’ll need two balance-transfer cards to accomplish this.

Can you give me advice?

I’m looking for advice generally–any tips on making this work and/or changing the plan so that it will work better. But I’m also interested in some specific advice on balance-transfer cards. Is it better for me to apply for my first balance transfer card now, while our monthly outgoings are crazy, or after we move, when they’ll have gone way down but we’re at a new address? Also, I’m worried that when I get my balance transfer cards, the credit limit won’t be high enough to transfer a big chunk of my 14-19k credit card debt. Any advice on how to reduce the chances of that happening or to deal with it if it does?

Some more details on our personal circumstances:

When I look at my credit report, I have a good credit rating (972 on Experian), but weak affordability for loans and so-so affordability for credit cards. We also have a history of moving around (we’ve left all our rental properties over the last decade within 1.5-3 years). I’ve got a low-interest 25k loan and my wife has a smaller one of around 7k. She’s got a bit of credit card debt, but not much. My credit card debt is spread over two cards.

Last edited by ChrisLV; Today at 11:04 AM.

Reason: Punctuation went insane when I copy-pasted


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