The Fixer: funding a new kitchen
Have you been left out of pocket due to poor service or sharp practice? Do you have a money problem that won't go away?
It can seem impossible to get a fair result when you are battling a financial issue alone. But never fear! The AOL Money Fixer is here to help.
My girlfriend and I have just bought a new flat and we need to put in a new kitchen.
However, after buying and furnishing the flat, and paying all the related charges, we don't have enough money left to buy the kitchen we want and get it fitted.
In total, we need about £3,000. But we can't use a 0% credit card for the whole amount as we need to pay the person fitting the kitchen and doing the tiling in cash.
What is the best way to borrow this amount, and be able to access at least some of it in cash?
R Taylor, Southampton
Dear Mr Taylor,
A credit card offering 0% on purchases is not the only way to borrow a smaller amount such as £3,000.
You could use your current account overdraft facility, take out a personal loan or apply for a credit card that allows you to have cash transferred directly into your current account.
If, for example, you think you only need one year to clear the debt, it might be worth switching to the Nationwide FlexDirect current account to take advantage of its fee-free, 12-month overdraft offer (although this may not cover the full amount).
And if you need longer, you could take advantage of a low-rate personal loan. Unfortunately, though, you generally pay higher interest rates to borrow a smaller amount.
That's why you can borrow £10,000 over five years with HSBC at just 3.9%, but would have to pay at least 5.8% with Ratesetter - a peer-to-peer lender that bring together individuals wanting to earn interest on their savings with those looking to borrow at low rates - to borrow £3,000 over two years.
A so-called money transfer credit card may therefore be a better bet to get your hands on the sum you need.
Cards of this kind include the Virgin Money Credit Card, with which you can borrow at 0% for 29 months, and the MBNA Everyday Card that offers interest-free borrowing for 21 months.
With both deals, however, you will pay a money transfer fee of 4% - or £120 on a £3,000 transfer.
You will also face high interest charges if you fail to clear the debt within the 0% period. Virgin charges 18.9%, while MBNA is at 14.9%.
Whatever your financial problem, write to firstname.lastname@example.org and The AOL Money Fixer will get on the case.