help! i've got some money... who to pay off first?

Storm · 9 November 2006 at 4:10PM

I would say that as you're likely to incur redemption penalties on the main loan to pay off the smaller bits & bobs - the 2 £700 debts, the council tax (assuming it's arrears) and the overdraft. That would leave you with £350 to make a nice dent in the credit card & you can start the process for claiming back your bank charges. The other way would be to leave the overdraft as it's not incurring interest at the moment & put £1850 on the credit card (though not until the 0% runs out - no point before even if you only get a few days interest!)

By paying off the O/D though you will hopefully have another lump sum in a few months to throw at the credit card - any idea how much in bank charges you're looking at claiming back?

beckystanway · 9 November 2006 at 4:11PM

a little question.... is the lightbulb moment when you realised you were in debt? and that was your debt at the time? (being nosey!)

pudding06 · 9 November 2006 at 4:13PM

they're happy to wait for the council tax... its on a summons thingy - we were waiting for an appeal for the banding and they got upset and want a direct debit now - but i can pay it at my usual rate ok. i'm told it doesnt affect credit ratings anyway?

I cant help you with this one - council tax is one of those strange ones which can be dangerous to your liberty if not paid. Make sure you take advice.

how much in bank charges vs savings on the interest rates on your cc when it kicks in?

as I understand it, and your cc works the way most do, that is payments come off the lowest rate of interest first then:

in 1 months time you'll be paying 15.9% on £1300 and 0% on the other £1300

however if you pay off 1300 they'll pay it off the lowest rate of interest first - that will be your 1300 at 0%

so you'll still be paying 15.9% for £1300 until its paid off.

pudds

beckystanway · 9 November 2006 at 4:14PM

LOADS!!!! with this bank in particular I have paid at least £1000 (maybe even £1500) in charges. How much of that I'll get back I dont know because you never get it all back (so I hear) but it will help with CC.

My sis claimed back £500 the other day - between ordering the statements and getting the cheque it was 1 month - took the bank 2 days to decide!

beckystanway · 9 November 2006 at 4:17PM

pudding06 wrote:

I cant help you with this one - council tax is one of those strange ones which can be dangerous to your liberty if not paid. Make sure you take advice.

how much in bank charges vs savings on the interest rates on your cc when it kicks in?

pudds

yeah that's a good point - save the money for the interest - i've got a good 4.75% account - and then pay that off when the credit card starts charging. The only problem with these different rates depending on what you did with the money - they will probably charge for the purchases part and assume it is the part that gets paid off last.

regarding the council tax - i've 'made an offer' of regular payments with details of my earnings etc - I suppose I should just keep the overdraft account open in case they demand it all and decline my offer. Should get a decision next week for that anyway.

pudding06 · 9 November 2006 at 4:22PM

how much in bank charges vs savings on the interest rates on your cc when it kicks in?

as I understand it, and your cc works the way most do, that is payments come off the lowest rate of interest first then:

in 1 months time you'll be paying 15.9% on £1300 and 0% on the other £1300

however if you pay off 1300 they'll pay it off the lowest rate of interest first - that will be your 1300 at 0%

so you'll still be paying 15.9% for £1300 until its paid off.

pudds

sorry bumped this cos it was an edit

pudds

help! i've got some money... who to pay off first?

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