Which to Pay Off First?

sortingitout1980

I have £900 on my Egg card which is at 16.9% APR (i think) and i have £745 on a catalogue which is 39.9% APR.

I put £470 qorth of stuff on my egg card before my LBM and i do have the cash to pay it off. However would i be better paying off the catalogue as i can transfer the egg card balance to my Barclaycard which will give me 0% interest on it until March 2010? Then i plan on moving everything to one card at 0%.

I think i know the answer but just wanted some advice.

I could probably also manage another £100 in October towards the catalogue bringing it down to £175 which i could probably then get paid off before Xmas and what a relief that would be.

MrsTinks

You don't really need an answer do you You've already sussed it...

Highest APR first - put as much as possible on 0% apr

What you're doing is called snowballing and is the fastest and cheapest way to pay your debts off - well done!

urg123

Hi

The usual rule of thumb is to pay off the debt with the highest APR first.

Have a look at the snowball calculator http://www.whatsthecost.com/snowball.aspx which will help you to decide what to pay off first.

Good luck on your debt free journey.

urg x x

september09

Totally agree with the above

sortingitout1980

Well i haven't paid the money onto the catalogue yet as am waiting for the next statement, however i've changed my mind and have this morning received a cheque from Barclaycard so can transfer my catalogue to that and not pay any interest until April 2010. It then means i can pay the money i have onto my Egg card. This will definitely cut down on the interest as between now and paying off the catalogue it prob would ahve cost me another £100 in interest!

uptomyeyeballs

Getting the catalogue debt onto a low/zero interest rate should be first priority. Then with 100% of your repayment going to reduce the debt instead of paying interest, you'll start to make headway and see the total reduce. It's psychological too.

onlypaddy

whoa hang on hold your horses - can you transfer a cataloue balance to a credit card and still be charged 0%? I think the safest route for this is to concentrate on highest APR first, like you say you could have that paid off next month. and surely a cheque from barclaycard cant be a good thing, dont these have extortionate rates of interest too???

sortingitout1980

After the 0% interest period the debt reverts to the standard 18.9% and my plan is to then put everything on one card at the longest 0% i can get so i only have one thing to pay off each month. Does this sound an ok plan?