Its only one card...how hard can it be? 30 June 2009 at 10:17PM in Debt free diaries 39 replies 1.9K views

scubaangel

Well in the grand scale of things my debt is small, so small as to be almost insignificant compared to some but to me right now it feels like a heavy weight and in the rapidly dimming post holiday glow I am finding it growing heavier. So I have decided to get it sorted as soon as I can.

So as of July 1st my debt is £812.52 on an egg credit card with an apr of 7.9%.

My snowball implies that as long as I dont spend anything else on it, my interest rate doesnt rise and I continue to pay off £45 a month I will clear it in 20 months....well that simply wont happen, the card is my petrol money, I have a car which I fill up on average once a month and only needs around £35 of fuel to fill totally (at 3 weeks agos petrol prices). Logic says therefore I need to find a way to overpay my set £45 by at least the amount I spend a month plus some to clear it quicker. :eek:

Hmm, the problem with that being that my usual way of earning extra cash is to do some mystery shopping, which adds to my fuel bill, getting a second job ditto, anyone know of any spare jobs which pay fuel allowance?

daily_2

Use the £1000 in the isa, and pay it off.

scubaangel

Its in an ISA - but I prefer to leave it there, it gives me at least mentally the rather comforting option of using it if I need to spend money (god forbid I need to replace any of my dive kit since I use it for work, or I have an accident in my car - Id struggle to pay the excess without it there), plus I have every intention of it becoming my fund for full time uni/ escaping my Dad's house at some point in the not so distant future.

I have a similar amount to my currently interest free o/d sat in a savings account also which again I want to leave there as my interest free period is shortly to end on the o/d. But beyond that I plan to throw all the spare cash I have at the card from now on.

Yes I realise the above statements are illogical but without *some* cash in my bank accounts I would go back to how I was a few years ago where I was scared to go out and do anything because I didnt have any money at all other than what I earned as tips in a bar job because I wanted to clear or match in savings my o/d after leaving uni - the account's interest free portion of o/d reduced by £500 a year and later this year will become entirely interest paying when I want to pay it off and close the facility entirely.

daily_2

You are worrying about how to get out of debt, and the answer is staring you in the face. If I read the post correctly, you are only in debt because you have the ISA.

Follow logic, it's cheaper.

scubaangel

I know, I know but without that buffer if anything *should* happen I would be in a mess, and without it would feel out of control, whereas at the moment I feel in control because although the card itself really isnt a huge problem, I want to pay it back now but dont need to yet, and still have the mental/emotional buffer of the ISA cash incase I NEED to pay it back urgently later on.

Logical no, sensible probably not, but I am both female and blonde. :rolleyes:

On the plus side I spoke to my OH a little while ago and hes planning to pay back the £100 I spent on his train ticket recently (once we hardly left the house other than to walk my hound coz the weather was horrid apart from the evening we planned to go out but ended up BBQing at home as the weather turned lovely- when I go to his we end up spending a fortune), which I'll knock straight off the card, and I am due a cashback amount from my holiday which again will come off the card outstanding instantly - IIRC the cashback will be around £200 so thats around £300 off it without trying too hard. :beer:

I also have some petrol station mystery shops lined up for this week which will fuel the car for the next 3 weeks at least (it bleeped empty today 350 miles after I last filled it up ) and cover itself with the card spending, leaving more of this months £45 as an additional payment, and once I've checked my tax figures whatever is untaxable profit to be knocked off the card too.

Me thinks I'll take the ISA out of my sig soon coz you'll keep beating me about the head with it otherwise wont you.

daily_2

If you want an imaginary comfort blanket, it's upto you, the money in the ISA is borrowed from the credit card, the longer it stays like that, the less money you'll have.

You could pay it off tomorrow, and the debt would be gone, that presumably would be a massive weight off your shoulders? Effectively, debt free at last.

Ask Martin

http://www.moneysavingexpert.com/cards/pay-off-debts

, or any financial adviser, and they would suggest the same.

I won't persist any further, but hope it will at least make you consider the idea.

scubaangel

Believe me I know, and I do understand but when my finger hovers over the transfer button I just cant do it

Prehaps once I have my head around the idea and have started making a dent in the card balance I'll find it easier to clear the lesser amounts with it.

Been having a play with the snowball and reckon I can easily match the interest over the life of the balance with a monthly overpayment so am initially aiming to pay an extra £52 this month, but will round it to £60 not including the MS petrol money when it comes in - prehaps come this time next month if I havent managed it it'll be easier mentally to take that amount from the ISA to cover it (and break the nice round figure it sits at currently)

My somewhat confusing maths tells me that if I pay off £105 this month (though will be aiming for more), and spend £30 I'm taking £75 off the balance minimum.....feel free to correct me if I'm talking rubbish though also any cash I make doing the £5 a day challenge will again be thrown at the card.

daily_2

At the risk of persisting, what is holding you back? Once the debt is gone, savings will build up quicker. If you can't bring yourself to pay off the lot, pay off £500, leaves you with a round figure.

Don't understand the 3rd paragraph - Snowballing is using every spare penny (including savings) to throw at debt, highest apr first.

last para, takes £75 minus one months interest off the balance, so around £69.65

tirlittan

I have to agree with daily though I understand your illogical logic.:D

But surely if you clear your credit card now with ISA savings, you still have the credit card for emergencies? And then you could pay the same amount you're using to pay your credit card montly to the ISA account?

scubaangel

I could, and it would make alot of sense but I still have that 'block' about the sodding thing, so for this month at least I'm going to see what sort of dent I can make before my next payment is due (I pay on the second day of the month so four weeks near enough), then we can all start argueing with my illogical brain again.

My automatic payment went yesterday so this afternoon I have made an extra £15 payment as that's what had been left in my account the day before payday. I've moved my ms taxable money in to my savings account for the time being with my £5 a day challenge money left in the spare current account ready to make an extra payment with later in the month, at the moment thats sitting at just under £60, but I have a couple of MS which will need a fairly large cash outlay before they get paid so will have to see what that actually needs then make the extra payment accordingly.

Took myself off to an interview for a second job on Wednesday so am hopeful that I'll get it (it was less an intervew and more a chat about transferring from one location I simply cant work at so am on a leave of absence from to another I can work at), which would be great, as it would allow me to push more money either on to the card or in to my savings once the cards paid off.

MissShoes

HI scuba

if I were you, as much as it pains you, I would pay the card off using the ISA- and the 300 extra you're expecting from your OH/holiday thing. Then, put the 45 a month and any extra you can afford or gain from mystery shopping into the ISA. It would be quicker and cheaper this way around- you would resave the 1000 faster than you would pay off the card I reckon?

Good luck either way...

Shoes

xx