Is a little bit of debt ok?

Midgie

I had my lightbulb moment just over three years ago.

Since then I have reduced my debt from £11,976 to just over £800 which is on a 0% credit card.

I'm desperate to start saving money for the deposit for a house - is it ok to just pay £50 towards this card every month and pretty much ignore it for a while? That way I could put my money towards building up a deposit.

What do you think?

Midgie

Lois_and_CK

Midgie wrote: »

I had my lightbulb moment just over three years ago.

Since then I have reduced my debt from £11,976 to just over £800 which is on a 0% credit card.

I'm desperate to start saving money for the deposit for a house - is it ok to just pay £50 towards this card every month and pretty much ignore it for a while? That way I could put my money towards building up a deposit.

What do you think?

Midgie

How long is your 0% for? Will you pay it off at £50 a month before the 0% deal runs out?

MrMuttley

Most people who visit this board would be very happy to have debts of only £800.

IMHO clear the debt anyway and then start saving. It's simply how i would choose to do it. If you are paying £50 pm to the card and saving some money as well then that is by no means a bad thing.

jenjade

I can't see anything wrong with that as long as it can stay on 0%! go for it good luck saving

fermi

Most people are here because they debt has taken over and they need to get control.

Where you draw that line is up to you.

Midgie

Yep! I am happy to finally be down to £800 - it took a long time to get there!
I just feel that I've finally got it to a point where it is under control - a little bit scared to let go of the reigns though.

I think I'll start saving. The 0% is until October - I'll keep paying £50 a month and when it gets down to a couple of hundred pounds then I'll pay it off.

Thanks
Midgie

rubyslipper

Hey Midgie

I just wanted to say well done you for clearing your debts down that far, you're an inspiration! :T :T

If you can pay off a bit of the card and save a bit towards the deposit each month without ramping up the debt again then do it. You must be a budgeting guru by now! Well done!

Ruby x

postingalwaysposting

Congrats Midgie on the debt repayments :j

I think the last 'debt' especially on 0% is your own decision how to pay it off. Me personally I was debt free a year or so ago but I do take advantage of store cards 0% offers and discounts. I then save in the mean time.... however the debt never gains interest as its cleared before the deal runs out and something is payed off it each month ~ even if its just £5. I have had a certain card for nearly 2 years and they have never had a penny extra from me :rotfl:

So in closing I dont see it being a problem unless you are paying interest on it

Midgie

Thanks guys! I appreciate the support!

Midgie

Pitchshifter

Hey Midgie, well down on paying down that massive debt.

My feeling is that you shouldn't "let go of the reigns" as you put it. £800 is still significant and if your circumstances change and you get out of the 0% period.
I would view it as a priority still, pay £50 like you said and in a savings account save towards the rest. When you reach the full balance, don't touch it until the 0% ends, then pay it all off.

I don't do debt.

Snaggles

From a 'getting a mortgage' point of view, having an £800 debt will make hardly any difference at all (I'm a mortgage underwriter).

Whether or not you should pay it off first though is entirely up to you. It is almost socially acceptable to have significant debt at the moment (although things do seem to be changing on that score). On here, we have a bit of a 'zero tolerance' approach. I think there's a healthy balance somewhere between the two, and personally, I would start saving for a house, and then challenge myself to make extra money (ebay, car boots, overtime, whatever) to clear the credit card before the 0% runs out.

If I hadn't cleared it fully in time, I would probably use some of the house savings to clear it.

Just a personal opinion though.