Which to try and pay off first?
sunday_girl
Forumite 186 Posts
Hi, just a question if anybody can help, as I can't quite work out the right way forward:
I have two debts I am trying to pay off first as per my signature. Hopefully this month the overdraft will end at about the £1300 mark which means it will be half of what is was. We were able to pay £1k off in December, prior to that it was always pretty much maxed. The interest when the OD was £2600 was about £33 per month and I think the equivalent APR is 19.9 % or thereabouts.
We also have a credit card with £2878 on it. The minimum payment is only just over £40 on this. I paid about three times the minimim last month and paid £37 of interest! The APR is 15.9%.
I was trying to tackle the overdraft first because of the higher APR but should I now be trying to reduce the credit card instead as the interest on the OD should now be less and I'm not sure I should be paying so much interest on the credit card every month until the OD is paid off?
I hope that makes some sort of sense to somebody!
I have two debts I am trying to pay off first as per my signature. Hopefully this month the overdraft will end at about the £1300 mark which means it will be half of what is was. We were able to pay £1k off in December, prior to that it was always pretty much maxed. The interest when the OD was £2600 was about £33 per month and I think the equivalent APR is 19.9 % or thereabouts.
We also have a credit card with £2878 on it. The minimum payment is only just over £40 on this. I paid about three times the minimim last month and paid £37 of interest! The APR is 15.9%.
I was trying to tackle the overdraft first because of the higher APR but should I now be trying to reduce the credit card instead as the interest on the OD should now be less and I'm not sure I should be paying so much interest on the credit card every month until the OD is paid off?
I hope that makes some sort of sense to somebody!
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However if it makes you feel better split the payments 80/20 in favour of the over draft, as long as 20% of available debt busting cash covers the CC. There is nothing worse than starring at debt that doesn't seem to reduce.
The first option is the head, second the heart