Loans credit cards and trying to manage them best

krisppp

Hi Guys,

I sent a message here a while ago when debt was getting the better of me and I'm happy to say that a couple of years down the road I'm getting myself onto an almost even base again.... but I was wondering if I could have your help again!

My situation was - 2k on credit cards a 6k loan and a £5k overdraft

My situation is now - 3k on 0% balance transfer and about £4.8k loan

But the other day I managed to get a Barclaycard which has given me about £6.6k 0% balance transfer opportunity for 16months. I've immediately transferred £3 of credit card balances onto this.

What I'm wondering is if it's worth overpaying my tesco credit card (0% on purchases anyway) by £3300 (putting it in credit) and suffering the 2.9% fee to begin with and using the extra money I'll be able to keep in my current account to pay off my loan MUCH quicker (the thought of chopping £3k off my loan makes me happy)

My loan repayments are currently high at £144.72 pcm. And I think this is at a high interest rate (they just charged me £66.10 on a balance of £4837.03)

Any thoughts would be greatly appreciated as I think that this would be doing the right thing - but I'm not sure and need some help I'm confident that I can save the £6k over the next 16 months (without interest) to make sure that when I eventually do have to pay this, then I can.

Thanks in advance for all of your help! I can't wait to be DF at last.

Krisppp

bottleofred

Hi Krispp,

It's up to you really, although I'd be sure I could clear the credit cards completely before the interest kicks in after the 0% periods. You'll also need to check if there are any penalties/charges for clearing the loan early, as this may help influence your decision.

Good luck in whatever you decide

Red

krisppp

so is there anything really wrong about having a credit card in credit? Will they penalise me for that at all?

MacsReturns

krisppp wrote: »

so is there anything really wrong about having a credit card in credit? Will they penalise me for that at all?

When I had my CC in credit they just didn't take any payment the following month (it's set up to clear by DD each month), no charges. However YMMV.

To be honest though, I'd have thought you'd be better off using that amount you'd be in credit to pay off part of your other debt, as that way you'd get a return on it (less interest to pay overall). Chuck as much as you can at the highest APR. HTH :beer:

krisppp

That was kinda my plan:

Get card in credit with 0% -> lump all of my spending on the card -> use the extra money that builds up in my bank account to pay off my loan really quickly.

I just wasn't sure if there was a better way of doing it?

But I guess they wouldn't let me balance transfer a loan?

C

krisppp

So I think that that's what I'm going to do... which will mean that - over the next couple of months, I can have all of my borrowing on 0% - but does that sound like a good idea?

I'm still quite confused?

C

isy1011

So you want to withdraw the cash from the cc to put into the loan. Wouldnt you be charged a very high % for doing that? Im not sure why you wouldnt just put the money straight onto the loan. Im probably missing the point. Have you tried posting on the credit card or loan forums?

I would also do a snowball calculator to check which to pay off first.

krisppp

No - not quite.

I can balance transfer a further £3500 onto a credit card (puttin git in credit) and keep that at 0% for 16months, with a 2.9% fee.

Then load spending onto the card in credit (until it's balance is 0)

and put as much as I can back into the loan.

Just not sure if anyone else has tried that?

C

whyowhy_2

I think I follow your thinking. I've done similar - spent on a 0% card thinking I'll use the savings to pay off other debt. It got me into an awful mess because not all the money got spent on paying off my debts and introductory rates don't last for ever.

However, I'm sure you are much more disciplined and savvy than me!

krisppp

Thanks whyowhy

I'm making a good dent into my debt already - which is why I feel confident enough to do this. I think I'm ready to give it a shot

Thanks for all of your help.

C