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  • FIRST POST
    • CharlieCCBrown89
    • By CharlieCCBrown89 19th Jun 17, 5:10 PM
    • 1Posts
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    CharlieCCBrown89
    Should I go debt free?
    • #1
    • 19th Jun 17, 5:10 PM
    Should I go debt free? 19th Jun 17 at 5:10 PM
    Hi,

    I'm being made redundant and I've luckily managed to get another job straight away. I have some credit card debt which I've already done a 0% balance transfer on around a year ago.

    My instinct is to use some of my redundancy pay out to pay off the debt completely and enjoy not having it hanging over my head any longer and freeing up £300 a month which I currently try and pay off my debt.

    However, friends and family are urging me to keep my credit card debt. They say that as it's a 0% interest card for the next 28 months, I should just save my redundancy money and pay the minimum amount off my credit card each month. Also, bear in mind that even if I pay off all my debt, I'll still have plenty for saving and spending on a few treats too. So paying off the debt wouldn't suck up all the money.

    My friends and family also think that if I pay off all my debt then my credit score will be damaged. I do also have a mortgage though and I always pay all my bills on time via direct debit which should help keep my credit score healthy.

    Any advice on whether I should clear the debt in one fell swoop or keep it and just pay the minimum each month?

    Thanks!
Page 1
    • MatthewAinsworth
    • By MatthewAinsworth 19th Jun 17, 5:24 PM
    • 2,840 Posts
    • 1,136 Thanks
    MatthewAinsworth
    • #2
    • 19th Jun 17, 5:24 PM
    • #2
    • 19th Jun 17, 5:24 PM
    Financially - stooze, but it won't help profoundly, but the danger of spending it could lead to long term debt
    Credit rating - I reckon paying off good, as if you hold a 0% balance for ages you'll be unprofitable and only paying the minimum​ might look like you're struggling

    Remember that what you do pay off is still available to you as long as you don't need cash, even if you closed the card after the 0% ends you could borrow it again on a new card
    • ReadingTim
    • By ReadingTim 19th Jun 17, 5:41 PM
    • 2,000 Posts
    • 2,917 Thanks
    ReadingTim
    • #3
    • 19th Jun 17, 5:41 PM
    • #3
    • 19th Jun 17, 5:41 PM
    • Divide the total credit card balance by the number of months left in the interest free period and repay that amount each month so the balance is cleared before they start charging you interest.
    • Keep a couple of month's worth of savings as an emergency fund in an instant access account paying as high a rate of interest as you can find (like Ulster Bank, here)
    • Throw the remaining money at debts, repaying the ones charging the highest rates of interest first (snowballing)
    • Don't succumb to too much "spending on a few treats"

    Lenders see your credit history, not your credit 'score'. The first is a record of fact, recording what has happened; the 2nd is a work of ficton, invented to sell you stuff.
    Last edited by ReadingTim; 19-06-2017 at 5:43 PM.
    • venison
    • By venison 19th Jun 17, 10:46 PM
    • 1,171 Posts
    • 1,223 Thanks
    venison
    • #4
    • 19th Jun 17, 10:46 PM
    • #4
    • 19th Jun 17, 10:46 PM
    Why not pay off all your CC debt and then use one of the cc's on a regular basis paying it off in full every month to show you are a "good" risk.
    Doomed I say we're all doomed.
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