Is is better to pay off debts or have savings?

babychick

I've got a bit of spare cash (!) this month and can't decide if it's better to pay off some of my credit card/store card or to put it into my ISA. (I have around 2.5k on cards and £220 in my ISA) What would you do? Debt-free or a bit of a nest egg? (I'm still making my usual monthly payments against my cards as well...)

Accountant_Kerry

Debt free every time for me, as long as your debts charge you a higher interest rate than you earn in your ISA it's the only way to go! :-)

andrina_nightshade

I'd use the £220 to pay off your debts. If they're on a credit card, they must be chalking up around 17% interest. Your ISA won't be paying anywhere near this.

Using that £220 will save you money in the long run

mandragora_2

Best is to pay off debts, then start saving - and don't buy anything till you have the money in a high interest ac somewhere, and can get what you want at a great price and with free interest - for aaaages, then pay it all off when it falls due!!