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Pay it off quickly or keep it?

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I owed 4 1/2 grand on a credit card which I've reduced to 3 by paying £150 per month. Just changed to Virgin for 16 months interest free. Should I continue to pay £150 per month or a lot less and use the rest to offset my mortgage which is with the one account?

thanks

Comments

  • Swans1912
    Swans1912 Posts: 1,658 Forumite
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    Pay off your credit card as quickly as possible, use the interest free period on your card to enjoy hitting that balance without it including interest.

    You should aim to have the whole balance paid off in 16 months, at the end of your promo period the rates will go sky high and there is no promise you can BT to a lower cost card.

    EDIT: Or...

    Work out how much you need to pay to pay off the credit card by the time the 0% period ends. Anything else then goes towards your mortgage, cash ISA or other savings.


    I would personally however prefer to get the credit card out of the way because you never know what will happen in 3, 6, 12 and 16 months time.
  • Jay08
    Jay08 Posts: 54 Forumite
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    I would clear out the credit card soon as possible.
  • withnell
    withnell Posts: 1,629 Forumite
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    As you're getting 0%, if you're disciplined pay the minimum each month but put the rest of the cash you would be using to pay off into a savings account. Then in a year's time you can pay off the CC balance, but you'll have earnt some cash on the savings
  • geokts
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    thanks for the replies. My instinct tells me to pay off the card quickly but if I can keep transferring the debt to a new card before the interest free period runs out wouldn't the money be better in my one account offsetting my mortgage interest?

    George
  • ShelfStacker_3
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    In the current climate, I wouldn't rely overly on 0% deals being widely available much. Clear the card off.
  • geokts
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    Thanks for the help. Pay the card off it is!
  • Degenerate
    Degenerate Posts: 2,166 Forumite
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    You're not relying on 0% deals being avaliable if you have savings available to pay it back at the end of the 0% period.
  • anotherpaul_2
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    geokts wrote: »
    thanks for the replies. My instinct tells me to pay off the card quickly but if I can keep transferring the debt to a new card before the interest free period runs out wouldn't the money be better in my one account offsetting my mortgage interest?
    That's what I'd do - try to put asside enough in the savings so that you can clear the balance at the end of the free period, then transfer it to another card and keep offsetting. You have the money available to clear the card if you can't find a card to transfer it to.

    Of course, it's only work transfering again if the offsetting is saving you more than the transfer fee, which is going to depend on the interest rate on the mortgage.
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