Pay off credit cards?

Blackpool4

Hello
Currently we are juggling a £600-£800 overdraft and have £5'500 on the credit cards, (it crept up a few big expenses, failed transmission in the car, failed propshaft) we have an endowment policy that has been running for approx 15 years with 10 to go its worth £8'200 cashed (we have tried to sell it but the first couple of responses have told us they cant better the cashin value) we switched to a repayment mortgage a couple of years ago and no longer need the endowment or the life cover, is it worth cashing it and clearing the debt on the credit cards and the overdraft? or carry on chipping away at the debt and let the endownent reach its end forecast is between £15'000 and £21'000 at the end date, also has anyone taken a repayment holiday on thier mortgage apparently i can have 1 - 6 months any issues if you do this.

Thanks

NickX

You really need to get the Debt onto the lowest interest rates possible.

You haven't said what APRs you are paying but if you get a reduced rate with your existing card providers, this will help. Alternatively if you have a good enough Credit Rating have a look into getting one or more 0% Credit Cards that you can transfer the balances to, and leave your endowment intact. Good Luck.

bigbloke45

I would think that the APR's you are paying on your debts far outway any returns you might get on your endowment.

Also, the projected retun on your endowment is just that: a projection; it will bear no resemblance to what you would actually get at maturity. What has happened in the past with your endowment is irrelevant, you cannot change it.

What you can change is your current debt situation. What is the point in carrying on paying endowment premiums and debt payments if the endowment will perform at a lower return than the interest you are paying on your debts?

Do your sums and then make a decision,but make the decision on the facts as you would if asked by your best friends in the same situation; i.e do it with your heads and not your hearts. Not easy, but so good!.

Best of luck.