Should I pay off my credit card

Nic459

I'm new to the site and this is my first post so be gentle with me. If my savings aren't getting much interest would I be better off using them to pay off my credit card? I've been trying to over pay to reduce the balance and I'm spending about £150 a monthto do that. Would it be better to pay it off and use the £150 to replace my savings. I'm a bit nervous about using up savings - who knows if I'll still have a job in 6 months. I notice the credit card companies haven't put their interest rates down!

YorkshireBoy

A better idea would be to balance transfer the debt to a 0% card.

Best of both worlds?

NickX

roves1 wrote: »

0% cards aren't worth the hassle and potential downsides imo, for the minimal difference they would make to your situation.

I beg to differ on this point. If you can get the debt down to 0% APR, then you make money because you will earn interest on your savings. IMO it is the easiest way to make money back from the Banks and Credit Card Providers.

YorkshireBoy

roves1 wrote: »

0% cards aren't worth the hassle and potential downsides imo

Please could you give some examples of the "potential downsides".

If you lose your job, then you can use your credit card then

For cash?

YorkshireBoy

roves1 wrote: »

Savings rates are so low, that any money made would probably be a trivial amount.

"Money made"? The OP is trying to ensure they have some liquidity in these turbulent times should the worst happen.

In summary...

The OP has debts which are incurring (substantial?) interest.

They also have some savings that are earning (very little?) interest.

They are asking the question whether to pay off the debts with the savings.

Now the standard advice in such a situation is always yes.

But CRUCIALLY...

The OP is worried about job security, and

It sounds like the debts would wipe out the savings.

Now, the advice I gave was to switch the debt to 0%, and keep the savings for a rainy day...NOT to start stoozing!!


EDIT: You've edited your post whilst I was replying, and seem to be confusing stoozing with rate-tarting which I was suggesting. Maybe that's where the confusion lies?

bengal-stripe

YorkshireBoy wrote: »

Please could you give some examples of the "potential downsides".

Wanna know the downside?

You transfer the money to the new card, then you have the old card with no balance and a nice credit limit burning a hole into your pocket. Now you go out and spend, as you have all this beautiful money available.

And before you can say “Jack Robinson” you have twice the debt, you had before.

Been there, done that, got the t-shirt!!!

YorkshireBoy

Thanks both for the downsides. Understand it's all possible, especially running the debt up again, but still maintain it's better to have the debt at 0% and retain liquidity in these troubled times.