Best use of £1500?

OneSpike

We've sold my car to my father (good ol' Dad!) for £1500, which is about what we would have got on eBay. He's retiring and giving back the company car, so this works out perfectly. A friend's husband is about to get a company car himself, so she will get his old car, and her car becomes available. It's not a horrendously knackered old banger, but it is quite old, a G-reg Nissan or Toyota. Anyway, I don't care because she's offering it to us freeeeeeee!!! :T It hasn't cost her a fortune is servicing, and it's MOT'd and taxed til May/June, so we're calling it my birthday present (January baby).

So, that means the £1500 we'd expected to use on buying a replacement (cheaper to run, less neurotic and sadly less beautiful than the Laguna estate) second car is suddenly ours to play with. Our options are:

• Pay £1500 off our highest rate card or loan
• Pay off two or three of the smaller card bills - £300+, £500+, and reduce the overall number of creditors
• Pay off the debt on our gas and electricity bills and switch to a cheaper provider
• Pay off our HSBC overdrafts and kill off all links with them completely as we now use a different current account
• Put it into high interest savings

Sadly stoozing isn't an option as no credit company would touch us with a bargepole just now. I know usually the mantra is to do number one, but I wonder if that's really our best option. Having some savings would feel wonderful, but so would killing off the overdrafts on the old accounts and reducing our overall number of creditors. Then again we could reduce our running costs if we changed gas/elec providers.

On the basis that we're in a total pickle anyway as we're making dramatically reduced payments to our creditors just now anyway, what do people think is the best move?

Broken_hearted

Have a holiday.lol

I'd pay off the smaller debts as the feeling it gives you is great.

woohoo_postingid

My initial feeling is to pay off the highest interest rate card first.

However...

you could pay off the smaller cards and this would then enable you to focus on the smaller number of debts and chuck more money at them each month.

In short - I don't really know!! :rotfl:

lynzpower

Id imagine the smaller debts woulod be a great boost- plus give you extra to snowball to the highest APR debtor.

Sometimes the smaller ones also have high APRs in terms of store cards etc...

OneSpike

Broken_hearted wrote:

Have a holiday.lol

Oh god, don't tempt me LOL! I think the tent etc will be dusted down next year...

itsarichmansworld

I would say for the feeling a few of the smaller ones.

But the DFW way would be the higher rate, save interest etc

dinkylou

Pay off some of the smaller ones. Then that'll be less accounts to worry about and give you those payments to add to the others.

nethesi

OneSpike wrote:

• Pay £1500 off our highest rate card or loan
  
• Pay off the debt on our gas and electricity bills and switch to a cheaper provider

hurray! so nice for you to have a windfall - and very virtuous not to consider blowing it:A

i would pick one of the above two options depending on how uncompetitive your supplier is: i'd go to uswitch to check how much you could save, and then - for simplicity compare this with the annual interest you'd save on paying off the same amount of debt:

the data you need is:
amount owing on electricity and gas
interest rate on highest card
how much you could save by switching
are the lecy, gas bods charging you interest? - if so what?

then add up switching savings with interest charged by them
compare with highest debt interestxamount owing on utilities.

whichever has the biggest saving go for(i appreciate this may not be completely clear :rolleyes: - if you want to pm me the data i can calc 4 you and explain what i mean)

if you do switch don't forget to use Quidco or martin's link to get more cash back!

this is the hasrd nosed, what will save you the most view though... you might prefer the suggestion above of getting rid of a few small debts

enjoy the feeling whatever you decide though! sure you don't need me to say that:p

bananakinz

It would give you more satisfaction to reduce the number of debts, so I would clear the stragglers hanging around, then use this money to hit your number one debt.

With regards to your gas and electric - how much do you owe? As some suppliers negotiate (sp?) with your current supplier and can transfer the debt, maybe worth asking??

oops_a_daisy

how much are you being charged for your overdrafts ? I think It may be a good idea to do a mini SOA on all of your options listed and have a look at it that way

lil_me

I would go with whichever you're paying the highest interest on. See if you can clear a few and pay the money you have extra each month off the others.