Hello, newbie here :)

lollipop89

Hi there,

I was just looking for some advice really. I married my husband in October and as we are currently trying for a baby, we are attempting to clear as much of our debt as possible. We have £1,800 on a Virgin CC which is in my mom's name (was £4,000 but we sold his car and paid £2K off last month) and this is the one we want to pay off first as it is not in our name. We will be paying £400 a month off this as of 24th June so can hopefully get rid of it soon.

What we're not sure about is what to pay off next. We have £1,200 overdrafts (£400 on 3 bank accounts) and £1,000 on a Natwest CC in my name.

Does it matter which gets paid off first? As far as I know, the interest on the Natwest card is around 16%, I am currently paying a £25 minimum payment off it each month and the interest is around £15 per month.

Thanks in advance.

rdchick

Hello and welcome!

If you're not paying any interest on your overdrafts I would suggest the credit card, then each of the over drafts

Tixy

Hi and welcome.

Sounds like you are in a good position to clear most of that debt off before a baby arrives (even if you strike lucky quickly!) .If you can continue to repay at £400 a month after the mom card is repaid then it probably won't make too much difference in terms of overall cost.
Usually we would advise working out the APRs for all debts and paying off the most expensive first. I know a lot of people find it easier to tackle all the other debts first and leave the overdraft to the end.

loopy.magic

Normally overdrafts are more expensive then cc. Call up the banks and find out the APR interest rates for the overdrafts, simply compare against the 16% (check this as well, as it didn't sound like you were completely sure about this) on the Natwest and tackle the higher interest rate debt first and work backwards (e.g. if overdraft A has a higher interest rate then overdraft B, then throw all of your extra money at overdraft A first).

rdchick

my overdraft costs me £60 on average a month.. it's my first port of call to get rid of now!

lollipop89

Thanks for your replies, you're all really helpful

I pay about £1 interest a month on two of the bank accounts and about £5 on the other, am guessing that's cos I don't pay in as much into that one every month as they are all with the same bank? But as it's less interest than the CC we will attack that first I think.