Overpay or credit card?

rharwin

I am hoping somebody may be in a position to assist.

I currently have an outstanding mortgage of £179000 and currently on Nationwide's SVR of 2.5%. House currently valued at £205,000.

My only other debt is £4000 on Virgin credit card which currently has APR of 0% until May this year.

I am looking at increasing equity in my house and will be looking at moving in 2-3 years.

Should I concentrate on paying off my credit card debt even though 0% or just try to transfer it to another 0% card in May or start paying off the debt after May. I actually also have a Barclaycard with a transfer rate of 5.6% for life of debt. I have nothing on this credit card.

I have an excellent credit score and will applying for other 0% credit cards affect that score?

Any advice would be very much appreciated.

Charterhouse

Personally speaking I would pay off the credit card, since even 1 month's interest on it could be as much as £100 if you ended up missing the transfer, and it makes more sense to clear the potentially more expensive debt first. I also understand that the availability of these 0% deals is much more limited than it once was.

The Nationwide SVR is very low but likely to rise so it's still worth paying that down after the credit card is all gone.

getmore4less

A BT fee will likely be 2%+ so cost more than the mortgage anyway

Clear the cards, save it up in a savings account till may to get some interest.

Then look at the high rate monthly savings accounts along side the mortgage, should find something that pays morethan 2.5% after tax.

Joe_Bloggs

This echoes the other responses.
Start saving now to be able to pay off /minimise the debt in May would be my first choice. You tend to pay arround 3% when transferring balances to other cards so that is £120 down the drain in an instant. It would take you a whole year to earn 3% on £4000 in a top savings account. Switching debt between cards is not guaranteed in the long run. If circumstances change then you may be stuck exactly where the card lender wants you to be.

I am not against credit cards and I alternate between temporary 0% on purchases deals and then switch back to an existing 1% cashback card. The money I spend on the 0% card is balanced by money in savings accounts earning interest.
J_B.