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  • FIRST POST
    • nemobrown
    • By nemobrown 18th May 17, 3:17 PM
    • 7Posts
    • 1Thanks
    nemobrown
    Self employed with credit card debt, do I use my emergency fund?
    • #1
    • 18th May 17, 3:17 PM
    Self employed with credit card debt, do I use my emergency fund? 18th May 17 at 3:17 PM
    Apologies if this has been asked previously. Most advice I've seen regarding credit card debt advises that savings should be used to pay off the debt first.
    I currently have cc debt of £5500. £4200 is at 0%, the remainder is at 10.9%. I am paying roughly £60 more than the minimum payment each month on this card. I have a meagre emergency fund of £750, which would basically pay my rent ( but no other outgoings).
    Should I use this to reduce my higher cost credit card, in which case I may have to use the credit card if work dries up, or should I keep hold of it and just continue to overpay as much as I can?
    Any advice/ thoughts greatly appreciated
Page 1
    • easy
    • By easy 18th May 17, 3:35 PM
    • 2,264 Posts
    • 2,643 Thanks
    easy
    • #2
    • 18th May 17, 3:35 PM
    • #2
    • 18th May 17, 3:35 PM
    Hmm, its a difficult one, but in your shoes I'd be tempted to take the hit of the interest on the £1300 and keep hold of the £750 "emergency fund". If the fund was more like £7500 my opinion would be very different, but you need a bit of cash-in-hand to cover your living costs in case you are ill or without work for a week or two.

    As you say, throw as much overpayment as you can at the account which is costing you interest - including selling any unused stuff you have in the house on ebay and downgrading your phone contract to the cheapest you can get to meet your needs and using the money you liberate to pay off that card. - I'm assuming you are not in a position to get another 0% card at the moment? Obviously if you can, then do that.

    When I was self employed I tried to keep enough money in the bank to meet 3 months basic living expenses as a safety buffer. It took me about 5 years to save that much up though.
    I try not to get too stressed out on the forum. I won't argue, i'll just leave a thread if you don't like what I say.
    • Fireflyaway
    • By Fireflyaway 18th May 17, 4:39 PM
    • 1,171 Posts
    • 1,205 Thanks
    Fireflyaway
    • #3
    • 18th May 17, 4:39 PM
    • #3
    • 18th May 17, 4:39 PM
    Carry on paying it. Use the emergency fund and you can be sure an emergency will crop up! Keep it there and just keep chipping away.
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