Credit card conundrum

Thriftylady

I had three credit cards, and have now cleared two of them. One has been closed, the other will be closed as soon as I receive confirmation that the balance is now zero. My remaining card I am keeping, as I am now a 'responsible' credit card user - I haven't added to the balance in months and no longer have any desire to. I am paying away at bringing the balance down but don't have enough money to clear it completely at the moment, I reckon it will take me about another two or three months.

Anyway, heres my question. This is all theoretical, I'm really just thinking out loud. My balance is around £700. On payday I move all my 'bills' money into a joint account, so mortgage, car , insurance etc is always paid out of this account and neither of us touch it for anything else. This leaves about £500 in my own account. Of this £500, I have to pay £95 on a personal loan (which is my next target once the credit card is gone), my mobile phone bill (£20), and my company sharesave contribution (£35). If I took all my remaining available money and just paid it towards the credit card bill, I would be left with absolutely nothing in terms of cash. But if I used the credit card for the outgoings I would usually pay cash for, I would still have brought the balance down by the time next payday comes round (and earned cashback, although I know this would be outstripped by the interest on the credit card). Then I could do the whole thing again. Would this approach save me money in interest? Or would it be cheaper to just put the money in a savings account until I have enough to clear the balance?

I know the obvious answer is a 0% balance transfer, but when I am so close to clearing the balance anyway, it seems like a lot of trouble to go to, because my current card is the credit card that I want to keep for the long term (when I will be in a position to clear it in full any time I use it) due to it having cashback.

Any thoughts ?

all_hours

it would save a small amount in interest by paying in a lump sum initially then spending in dribs and drabs over the month. also you wouldn't be drawing out round figures from the cashpoint and risk spending the few extra pounds. you'd be using the credit card more like an overdraft for the next 2 or 3 months.

i'd be tempted to do what you're planning.

lynzpower

If you need to deal in cash., lets face it we all do, then dont use your CC. Ive never heard of any where cash advanvce is less than 15%. It seems as if this isnt a 0% card for purchases either, so theres no way I would do this. Just pay off from your CC what you can afford after your outgoings, much simpler. Or am I missing something here?

Thriftylady

Yeah, I would have to have some sort of cash available I suppose, for wee emergencies, because I wouldn't want to be withdrawing cash using my credit card. As for making purchases, I was thinking more of stuff like clothes (unfortunately essential at the moment as I am 6 months pregnant and fast growing out of everything I own).

I was sort of thinking out loud. Its a pain, because what I would really like to do is be able to make adhoc payments towards the credit card, but my debit card from my bank is not compatible with the website from my CC provider (bank says its the CC companys fault, CC provider says its the banks fault) and my banks internet banking facility only allows transfers to a very limited number of outside companies, of which my CC company is not one. So the only opportunity I have to make a payment is by my once a month DD, which is why I was considering paying as much as possible off it immediately after I got paid, and then spending on the card again to see me through to the next month.

lynzpower

This isnt the co-operative bank by any chance is it?

You can make ad-hoc payments over the phone I found as good, or of course with cash at the bank/ post office.

Thriftylady

The CC is with egg. My own bank are probably the problem, even some retailers don't accept their debit cards (something to do with the security code) but I've no choice but to stick with them because I also work there and having my account with them is part of my T&Cs of employment. Would be funny if it wasn't such a pain.....

lynzpower

oh god, nightmare....

i know this is probably more hassle than you can be bothered with, vould you get another account, ie get your wages standing ordered out of your rubbish account, and into a real one, and then pay everything out of that?