Newbie - advice needed to start

Salsera_2

Hi people

I've been reading and searching,have tried to dohte claculation without much succes and i dont know which to achieve debt freedom asap.
I'd like your appreciated advice.

this is the picture:

I owe on my Credit card ₤2500 and am still on 0% till end of April/06 RBS

I have a ₤1,000 overdraft on my current bank account
Current bank account running cost are ₤15/month
First ₤500 overdraft are interest free
Last ₤500 have interest (sorry don’t know the figure at this time)

I want to eventually open a new current account as this one is expensive to run.

I also have a Barclay card past its 0% time that I use for very small purchase ( less than 50/month and pay off every month. I use this just to boost my credit record

I also have a saving of ₤ 8,500 at 5% interest (to be used as part of deposit to buy my own place… yah i wont go far with that i know)

My current income allows me to “save/reimburse” up to ₤300/month..
My objective is to be debt free and to build my deposit asap. I also want to limit damaging my credit score.

Should I get a loan to repay my credit card?
Should I use my saving (that scares me as I want to build this up not use it)

I also thought of taking another credit card at 0%, transfert the balance from RBS CC then putting the repayment i would make into a high interest saving account till i get topay full amount (and be a CCtart tilli can make the full payment)

What do you think?

Thanks in advance

moneyuser

Change your current account ASAP. A & L look a good bet.

If your objective is to be debt free then use your savings to pay off the £2500 debt. I know it's a difficult decision to use your savings, I was in a similar position, where I paid off my car loan using my savings but it really was the best decision I made.

I don't even know why you are thinking of getting a loan to pay the debt. DO NOT DO THIS.

Another option is to get another card after the 0% ends for this one, preferably a one with a long 0% offer, at least 9mths. Then spilt the £300 you can save between saving and paying the debt. This way the debt is going down and your savings going up and you haven't used a lump sum of your savings. I would probably use £100-150 to pay off the debt.

Rafter

Salsera,

There is certainly no point earning 5% interest after tax on savings while paying higher rates of interest on a loan or credit card.

If you can, try and balance transfer the card to another 0% card at the end of the free period. There is certainly no point repaying a credit card which isn't incurring interest.

You do not say who you bank with, but it sounds like you are on some premium account if it is costing you that much per month. Decide whether the benefits you get are really worth it.

Suggest you have a look at one of these high interest (10%) regular savings accounts from Halifax, Barclays or A&L. You could save £250 per month into one of these as long as you don't need to access the money for 12 months.

Try to budget each month to avoid using your overdraft.

An egg money card might suit you too - you earn 4% on a positive balance and, subject to credit rating only pay 7% on balances you carry forward. This may be cheaper than using an overdraft and you earn cashback too.

Good luck.

R.

maforduk

Sent you a PM

Salsera_2

Thanks for your response and PM.

I'll be doing my home work on this this weekend.

simonleblank

I I were in your position, I would pay off the card with savings and cut it up. I would also pay off o/d. When you get a mortgage, get a normal repayments at a fixed rate you can afford. That is unless you are a very experienced MSE Stoozer, then an offset Mortgage BUT you have to be VERY disiplined (Not like me)