Paying off credit cards

dana344 · 3 December 2016 at 5:21PM

Hi . Im new here , I have got a 3 credit cards which i would like to pay on my own . I have got a Barclays card with spend just over 3000£ lloyds 1500 and tesco 1200 , Tesco still 0% till march for the other two I pay APR . I would like to start paying them off in a sensible way . Should i concentrate on paying as much as possible now for the Tesco one ? I thing the Halifax can give me now a new card for 21 month for 1200£ 0%, would that be sensible to take it before march and set up direct debit to pay it off in 21 months after doing the credit transfer from a Barcleys one ? I would be a bit scary to pay off 4 credit cards but i would like to pay them off in a most sensible way , dont spend on them and never take them again . Thank u for advices .

Superscrooge · 3 December 2016 at 7:08PM

Make minimum payments on your Tesco CC until the 0% promotion finishes.

Try the MSE credit card eligibility checker which will give you an indication of whether you are likely to be accepted for any 0% balance transfer cards.

https://creditcards.moneysavingexpert.com/?balance-transfer&_ga=1.66802286.157308799.1449507210

If you can get a 0% BT card then use this card to transfer as much of your most expensive debt as possible (the CC with the highest APR)

You then throw as much money as you can at paying off the credit card debt with the highest APR (but always remember to make at least the minimum payment on any other cards). Once the most expensive CC is paid off, you then move on to the next most expensive card etc.

Once each card is paid off I would cancel them to avoid further temptation!

dana344 · 3 December 2016 at 7:19PM

Im not sure about paying the minimum payments until march for the card with 0% APR , if i would pay anything extra now I will have less to pay later one .

phillw · 3 December 2016 at 7:26PM

dana344 wrote: »

Im not sure about paying the minimum payments until march for the card with 0% APR , if i would pay anything extra now I will have less to pay later one .

That is true. However if you put the money somewhere that pays interest (like a 5% TSB current account) and then pay it off in one large lump sum when the 0% ends then you'll reduce your balance by a greater amount than paying straight off the 0%.

Think of debts like savings accounts. Don't put money in 0%, put it in 20%.

dana344 · 6 December 2016 at 11:56PM

Whats is debts like a saving accounts ?

austonic · 14 December 2016 at 6:41AM

dana344 wrote: »

Whats is debts like a saving accounts ?

He means, when you are saving money, you usually find the highest paying interest account to put your money into (with due consideration given to risk and accessibility).

You should do the same with debt, namely invest in the highest interest charging accounts to pay them off more quickly than any other account and just pay the minimum required on lower interest charging accounts.

Note that on accounts that have several different rates applied (usually because of various promotions) any repayments pay off the highest interest charging elements first automatically (thanks to a change in the law a few years ago, before which many companies applied to lowest interest charging elements first such as 0% charges!).

Dobbibill · 14 December 2016 at 7:39AM

Play with this snowball calculator

http://www.whatsthecost.com/snowball.aspx

this will show the impact of paying the interest bearing cards first and how much you would save from not paying interest depending on the order you pay the cards.

You have £5700 of debt to pay off - would you prefer to do that with minimal interest on top of it or the maximum interest the CC companies can squeeze out of you.

Paying off credit cards

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