Pay off debt or Save?

Legacy_user

Hi guys

I have a CC and an overdraft... throw backs from when I was a student.
My overdraft costs £5 a month to run and my CC is currently 0% [till about september]

As of september last year I thought I would create a savings account that now has a fair bit of money in it, and is still at 6% [which is nice given the current climate].

I had originally thought about saving until my 0% ran out then attempting to pay it off with my savings....

However I wonder, would it be better for me to transfer the money to another 0% card [incurring the transfer fee] but keep my savings, or better for me to just pay it off?

I think technically I will be better off if I keep the money on credit cards as the interest on my savings account will soon outweigh the transfer fee, however I know it would "feel" far better to have paid it off...

Does anyone have any experience in this or fancy lending some advice?
Thanks!

Gemmzie

Personally, I wouldn't spend the savings below the level of the CC balance. In the current climate, you can't guarentee that you'll find another 0% card come September so I wouldn't take the risk.

Overdraft-wise, how much is it for? £5 a month is fairly high actually unless it's a lot.

System

My overdraft swings between 1000 and 1500 throughout the month.
I save 300 a month.
My CC is currently about 2-3k.

I figured that I would leave the overdraft aside a little as £5 isnt much to keep it going at all thankfully.

I was hoping to have saved enough money to cover the CC so I could pay it off if I needed to, but was wondering what the best method is?

FYI I have been in debt for the past 8 years or so and this is the light at the end of the tunnel, Its been a hard slog and I know a lot of people in here have it a lot worse but it just takes hard work and time... I am not far better at managing my money than I used to be!

Thanks

garthdp

The way the economy is going, lose theCC debt when the 0% runs out then start hitting the overdraft - that's £60 a year "saved"

TismE_3

:T I would say pay em off.

Gemmzie

I thought it might be, £5 on £1000 is about 6.5% so it's actually costing you at the moment to have the savings.

System

Ahh I never saw it that way - doh!
So it woudl make sense to pay off my overdraft now... but... its probably worth saving until I know what im doing with my CC? I'd rather have an overdraft than be paying 15% on a CC [if I cant get a 0% deal]

Thanks for all the replies!