When should I pay?

princessk_3

Wow, I didn't think I'd spark so much debate! I thought this would be a simple yes or no answer! Thanks for all your input.

With all the information available from MSE I have set myself a proper budget and am trying very hard to reduce my debt while supporting my OH who is currently unemployed. Luckily I am able to make all my payments and am not behind on anything but we are on a very tight budget.

I will try to clarify the situation. I have 4 credit cards, 1 with payment due at month end and 3 due mid month. The way I have set up my budget means I currently pay them all at month end (in advance, not arrears). Fortunately, I am able to always pay above the minimum required. Right now, as advised by MSE I want to focus on paying off the highest rate interest card first.

So, I have the money to pay them either weekly or monthly and I can re-jig the budget so I can pay monthly at the statement printing date. However, this may take me a couple of months to save up to.

Your advice has been great but I'm still confused as to what would be best! Now that you have more information - could you please advise again? Thanks again all you wonderful, knowledgable people!!

CannyJock

Simon_Preston wrote: »

Surely by paying off a large lump sum at the start of the month (that being when the statement is printed) will save more on interest than paying smaller amounts over the course of that month?

Nope. Weekly payments will be made "before" the start of the month, saving money as YB says.

CannyJock

princessk wrote: »

Your advice has been great but I'm still confused as to what would be best! Now that you have more information - could you please advise again? Thanks again all you wonderful, knowledgable people!!

Do what YB said originally. Pay as soon as you can each week rather than waiting.

If you've got a number of actual debts, you need to list them in APR order, make the minimum payments on the lowest debts and divert all "overpayments" and other funds to the highest APR debt.

princessk_3

Thanks all. I think I will go with weekly payments. I did think this would be the best option. Also, it makes life easier knowing that the money is out of my account and wont be accidently spent!

Cheers guys.

david39

Princessk

You say :
"So, I have the money to pay them either weekly or monthly and I can re-jig the budget so I can pay monthly at the statement printing date. However, this may take me a couple of months to save up to."

If you are able to pay monthly at the statement printing date then that is your best bet - that is, as someone said before, the earlier you pay, the less interest you pay.

If you drag it out over a couple of weeks or so, then you will be paying interest on the money you could have paid off at the start of that period.

My earlier posting assumption was that you would not be able to pay on the statement date.

The bonus to this method, of course, is that if you have an emergency and are unable to pay when you usually do (on statement date) you still have a couple of weeks or so to juggle your money and still pay up by the due date.

Hope this hasn't clouded the issue even further!

princessk_3

Oh I am confused now! Mind you, it doesn't take much...

I've had a play around with my budget and it looks like I can start paying on the statement dates with not too much fuss. I think what's probably going to work best for me is to open a new account and weekly transfer the money, then pay out on statement date. Then, if I have a few quid extra I will also pay that in (to the highest APR of course).

What would I do with MSE???

x

CannyJock

I knew that last reply would just add confusion.

Don't open a new current account to transfer the money to, to then make the payment from.

Just make the payment direct to your credit card.

You will save interest.

Trust me, I'm a stoozer

td_007

princessk wrote: »

I think what's probably going to work best for me is to open a new account and weekly transfer the money, then pay out on statement date. Then, if I have a few quid extra I will also pay that in (to the highest APR of course).

That is a good idea to ring-fence and isolate the amount that you will available to repay cards. It is serves two purposes, one as you mentioned you will not spend it accidentally and secondly after having repaying one of your cards you suddenly realise that you are a bit short for some other monthly commitment.

I would suggest opening an savings or similar account which also allows transfer money externally (eg Websaver with Halifax) in the same bank where you have your current account. Hopefully you have an account that support faster payments.

CannyJock

td_007 wrote: »

That is a good idea to ring-fence and isolate the amount that you will available to repay cards.

Better than just paying the money direct to the cards and reducing the amount of daily calculated interest charged to the OP?

td_007

CannyJock wrote: »

Better than just paying the money direct to the cards and reducing the amount of daily calculated interest charged to the OP?

I am assuming that the OP is not going to transfer on a daily basis or when a small amounts eg. £10 becomes available - it would be preferable but not very practical