Short Term Saving Advice

dizzyheights1

Hi, I moved my credit card debt to a 0% for 12 months card 4 months ago. I am now in a position to pay off approx £700 each month extra which will clear the balance. However I am unsure if I should throw the extra cash straight at the card or put it into a savings account for the 8 month period then pay off the card and hopefully earn a little interest. What are your thoughts?

Thanks in advance

cos69

Its certainly worth saving some of it to give you a little extra cushion for emergencies, maybe the first 2-months worth.

Its very easy to spend the money rather than save it, so might be worth just paying off the outstanding balance for the following 6 months and then clear the balance when the interest free period is up.

Consumerist

dizzyheights1 wrote: »

I am unsure if I should throw the extra cash straight at the card . . .

I think cos69 has hit the nail on the head, really.

If you are disciplined with your savings then there seems little point in paying back early on a 0% loan, bearing in mind you've already paid a fee (probably around 3% of the transferred balance). In these circumstance you should get as high a savings rate as you can and repay the balance when the 0% deal finishes. This is the most flexible option.

If, however, you may be tempted to spend your savings then it might then be safer to repay the debt by regular payments as you have indicated.
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