Negative Equity or Credit Cards first?

mesmorgan

How is everyone today??

My question is a simple one, though I'm sure the answer will be anything but...

I am currently in negative equity and credit card debt. Both are around the same amount, so which should I prioritise? I reckon I could get my credit cards to almost zero in 3 years.

Any suggestions?

Tixy

Hi

Unless you need to sell or remortgage soon then I would concentrate on clearing your credit card debt to start. Presumably you are paying much higher interest rates on the cc debt compared to the mortgage?

What amount of negative equity are you in? is it possible that in 3 years you could be out of neg equity anyway just from a small increase in house prices.

DVardysShadow

How will you deal with your negative equity? Pay off some of the mortgage? Do you need your negative equity sorting out [ie do you need to move?]

Effectively, if you pay off some of your mortgage, you will be borrowing on the cards in order to do it. It would be crazy to keep borrowing at 20% to pay off debt at 5% - unless you really do need to move.