Paying off CCard with savings

bleddlj

Just a question
My credit is spiral-ing up and up, i have an ISA that i saved to put as deposit on a house, should i just use this to pay off the credit card and start saving fresh? thanks for any advice

CLAPTON

if you are earning less in the ISA than you are paying on the CC then use it to clear the CC otherwise save it. (i.e. is the ISA AER less than the APR of the CCs)

In any event, you need to think why the CC is spiralling and adjust your lifestyle suitably.

bleddlj

Thanks for the reply, yeh makes sense, id say the CC intrest etc is more per month than my ISA is bringing in. I agree with the lifestyle, its not going crazy but seems to steadily rise, not particulary from me using it but mostly on the interest i seem to have to pay, thanks again

NickX

Can you get a new Credit Card with a 0% deal ?

If you can, then I would transfer the Credit Card debt over and keep the ISA.

I would be loathe to close an ISA because it is tax free and once you withdraw the funds you cannot put them back until the next tax year.

If you cannot get the debt transferred and are paying substantially more in interest on the Credit Card than you are earning on the ISA, in that case then it would make sense to pay the debt off with the ISA funds.

bleddlj

Sounds like good advice, i really dont want to use my ISA as its meant to be a deposit on a house, ideally i think its best to transfer to another credit card, its £4000, im new here but i guess there are lots of posts about what credit card offers a good balanace transfer, have you got any advice?

benf90

bleddlj wrote: »

Sounds like good advice, i really dont want to use my ISA as its meant to be a deposit on a house, ideally i think its best to transfer to another credit card, its £4000, im new here but i guess there are lots of posts about what credit card offers a good balanace transfer, have you got any advice?

Probaly best if you have a read through the guide on balance transfers on this site:

http://www.moneysavingexpert.com/cards/balance-transfer-credit-cards

dhassen

I hate to sound boring and I know someone already mentioned it, but you really need to address stuff before it spirals out of control! I assume unless you're mental you won't be buying a house for a good year or two (see house prices board ), but you say yourself that your debts are creeping up gradually. What happens for example, if you buy a house in a year with your savings, then in two years can't get a good new deal, on top of the fact that CC companies have a habit of increasing APRs when people appear close to the edge..... just a look out that's all. I'd suggest that most mortgage lenders aren't massive fans of credit card debt. Might damage your chances of a good deal.

If you can transfer the balance to a new 0% card, then do, as long as you close the current one straight away, never spend on the new 0% card, and make some efforts to pay it off. If you can do all that, then keep the ISA, otherwise, pay off those debts! You're lucky to have them, others aren't so fortunate.

bleddlj

Excellent, thanks for the advice, im new here and really impressed with the replies! thanks a lot, i have moved the CC to virgin, 0%for 15 months months hoping to have a large chunck taken off it in the next year. Yeh thinking of a house in 2 years so hopefully by then ill be clear of debt and increased my ISA further, thanks again for the good advice.

dhassen

Sounds like a good plan bleddlj.... good luck with it all