paying off credit cards

sp1tf1re · 26 March 2006 at 12:17PM

Please can you give advice.
We have the following debt on credit cards and have been fortunate to be given £10,000 by dad to pay them off. In which order or how much to each card should we do? Thanks.
here are the cards, the monthly interest rate, and balance :
Virgin 1.736% £7000
Halifax 1.66% £9500
Bank of Scotland 1.167% £8200
Sainsburys Bank 1.29% £5400
Co-operative 0.733% £7400

We are thinking pay off virgin, leaving 3000 to pay towards halifax. Or would we be better splitting the amount equally over all the cards?
any tips gratefully received.

Broken_hearted · 26 March 2006 at 12:19PM

Yep think that sounds ok

sp1tf1re · 26 March 2006 at 12:20PM

thanks ...

Broken_hearted · 26 March 2006 at 12:25PM

I tend to focus on one card at a time throwing as much money as I can at it, leaving the others at just above minimum payment(highest interest first). That way I feel more in control and its great when its payed off and I can move on to the next one.

sp1tf1re · 26 March 2006 at 1:57PM

thanks again broken hearted.

tyllwyd · 26 March 2006 at 2:44PM

Paying off the highest interest rate balance first is a good idea.

BUT that still leaves you with something like £27,000 of debt (plus now £10K owed to your dad). How do you plan to repay all of that? Because if things are headed towards bankrupcy or an IVA, then it doesn't make sense to accept the money from your dad, because it will all be lost and your credit rating will be shot to pieces anyway. If I was advising him, to be honest I'd tell him not to give it to you.

Have you thought about exactly how the debt was run up, and how you are going to manage for the future? If you wanted to post your soa (statement of affairs - basically a budget showing all your income and outgoings) we might be able to help you make a plan for the future.

james32_uk · 26 March 2006 at 4:56PM

Agreed with tyllwyd. Speak to CCCS or Payplan first unless you expect to be able to pay the rest of your debts without difficulty.

If it were me, I might pay off the debts with the highest minimum payments, thereby freeing up cash to snowball into the next highest interest rate debt.