What would you do?

Catseyez

With the help of this site and being inspired by the posters on here, I am now in a position to be debt free as of next month. Can't believe it!

Having not had a social life and only spending on essentials all year, I have saved enough to pay off my car (10 monthly payments left plus final 'deposit') early, saving me about £400 in interest. I will be paying this off when I get paid in a few days time.

Other than my car, I've got about £2,400 on a 0% credit card. I've been making just over the minmum payment each month and decided that any extra money I get from bank charge refund, car boots, ebay etc, will go towards this.

In January, I set myself a target of becoming debt-free by Christmas 06 but then brought this forward to the Autumn, when I saw how well I was doing.

The thing is, I've been promoted at work and am about to receive back-pay of quite a large amount. With the extra back-pay combined with next month's pay, I will have enough to pay off my credit card, making me debt free!!

However, I am in two minds as to whether I want to be debt-free so soon. As it is, my 0% card doesn't run out until November and I have been very disciplined with my payments and do not use it to pay for things.

I could keep saving (gaining interest) and then pay off my card in November. Or I could do a BT to a fee-free card (I hear the Post Office do 6mths at 0%) in November, and keep the credit card debt for another six months, whilst all the time earning interest on my savings.

Having saved to pay-off my car, I have enjoyed seeing my savings increase. Although I will own my car outright, I feel loathe at having to hand over several thousands of hard-earned money to the finance company! I feel the same about my credit card. So that is why I am wondering if it is better to continue with the e-baying & car boot and to throw the proceeds at the outstanding credit card debt.

I feel very confused because whilst I have been wanting to be debt-free for ten years (and never thought I would be), I know I should do the MSE thing and pay off the 0% slowly, whilst gaining interest on my savings.

What would everyone else do?

Can I just also thank everyone who posts on here as you are all truly inspirational. I know for a fact that I would not have this dilemma if it weren't for MSE and all you DFW nerds!

newmoneysaver_2

I would keep the money in a savings account for as long as possible- up until the point it would cost money to move it to another card (balance transfer fee, usually at 2%) or until I have to pay interest.

PS. Well done you:T

xela_17

Your heart is saying pay off the debt now as you'll feel fantastic but the sensible MSE thing to do is keep the money in the savings account until the 0% runs out. I know that all you want to do is say 'I'm debt free' but you are technically.

Catseyez

That's it, I will technically be debt-free but I am so looking forward to being able to shout it out from the roof-tops!

With the money I would normally be paying towards my car, I will put it towards the credit card, I think.

owessomuch

Good for you and well done!

Can't wait until the day when I'm debt free!

MrsTinks

personally I would pay off the debts... I would make sure I had enough for a kick butt bottle of champagne and then I would frame the bank statements and celebrate being debt free!!! You could stooze if you want but I would personally want to have at least a month or two where I could honestly say i didn't owe a penny to anyone at all But that's possibly just me

black-saturn

I would pay off the debts too and then start saving afterwards. Its amazing how paying the debts off will make you feel - on top of the world. Then the savings will mount up really quickly if you put what you were paying to dent into it.