What to do for the best...?

Blue_Peter_2

Hi,

I have two questions - keen to know what you think. First, these are my debts:

Student loan outstanding = £6.4k. 3.2%APR. Paying £117 pcm until 04/11.

Nationwide loan outstanding = £4.7k (6.7%APR) (Paying £80 pcm until 08/11.

Amex 'platinum' card = £4.3k. 4.9%APR - for life of balance. Paying c.£130 pcm. 5k credit limit but I never spend on it.

Lloyds 'gold' credit card = £850. 15.9%APR. Paying c.£30 pcm or more in a quiet month. 5k credit limit but have stopped spening on it.

Overdraft = 1.5k (17.9%APR) Trying to reduce it by £30 each month.

I have just received an unexpected £1000 in the will of an aunt and I don't know what to do with it for the best. I am now making manageable payments on all of the above but won't be debt-free until April 2011 - should I use it to pay something off, if so, what, or should I just put it in an ISA and forget I have it for a few years?

Also, I have an empty Barclaycard which I was going to cancel but they've just sent me some cheques to make a balance transfer, interest free until December. This happened before but the other way around - if I keep transferring the debts between the Lloyds card and the Barclaycard to make the most of these interest-free offers, will my credit rating be affected?

What do you reckon?

lynzpower

I would use the 1000 to pay off your LLoyds card and the remainder to your nationwide loan which will tale 3 months off the end of it.

Brassic

Hi Lynz,

As a newbie I'm just curious, why would you pay Lloyds etc, instead of the overdraft with the higher interest rate?

Cheers,
Brassic.

Kevicho

Use the 1k to pay off the bulk of your overdraft as that is the highest APR

southernscouser

I would pay it off the overdraft aswell. As long as you don't run it up again! :doh:

Have you seen the snowballing calculator?

Kevicho

Also, alternatively, you could use 200 of the loan for the lloyds card, use the amex (4.9% on all life balance transfers correct?) to move over the rest of the debt on that card, then put the other £800 against the overdraft

That way you cut interest, can cancel the lloyds card (you should see if you can negotiate some deals for BTs andf get the overdraft down further) which should improve your credit rating, which will be handy if you want to go for a 0% BT card in 6 months time

dinkylou

Check the t&c s for your balance cheques about overdrafts but if that is 0% then I would transfer the overdraft and lloyds to the barclaycard.

Then use the £1000 on the Nationwide loan.

When Dec comes, make sure you transfer to another card or pay it off or if have to, transfer it to your LOB card.

southernscouser

Kevicho wrote:

Also, alternatively, you could use 200 of the loan for the lloyds card, use the amex (4.9% on all life balance transfers correct?) to move over the rest of the debt on that card, then put the other £800 against the overdraft

Just check the introductory period hasn't ended. I was given 6 months but phone up to check or you'll be paying something like 15.9%!

Blue_Peter_2

southernscouser wrote:

I would pay it off the overdraft aswell. As long as you don't run it up again! :doh:

Have you seen the snowballing calculator?

Wow - this is fantstic! Just what I need I think.

My debts don't go up anymore - I've learnt my lesson there!!