£1035.72 to throw at a debt - which one please?

DebtFree2012

Hi there

I have the following debts:

Credit cards

Tesco £2043.58 @ 15.76% annually
Virgin £7007.86 @ 17.22% annually
Cap1 £4094.17@ 26.48% annually

Next store card £282.82 @ 23.76% annually

Loan (no overpayments allowed without charge) £3967.50 @ 22.59%
Loan £6850 @ 0%

I have had an unexpected windfall of £1035.72. Please can you help me decide from an sensible and emotional point of view where to spend this money. I would like to pay 1k to debt and have a £35 treat which is no common thing these days!

Comments on the above are -
I would like to clear Next as it's a thorn in my side and want to close the account for good.
Although C1 card is higher than Virgin I am going to be paying more interest to virgin over the long run so have been focussing on them recently (they have upped their min payments so I now pay min of £177 a month with apx £100 interest and £125 to cap1 with apx £90 interest).

I keep thinking I will pay X but then change my mind. Can you offer advice please? I have been turned down for balance transfer cards as having too much debt. I do pay every month and am not behind on anythiing since Xmas. It is staying that way

I just need to know which would be the best to put the money towards after I clear "next" balance (I think I need to do that for piece of mind and to prove that I can actually clear debts)

TIA

robpw2

http://www.whatsthecost.com/snowball.aspx this will help you pay off the right debts in the right order

gargrave50

no brainer - credit card with highest apr.

Looks like capital 1 xxj

bugslet

I'd fling it at Cap1 as well.

On the snowball calculator you can play around with the figures and see how much more it would cost you if you put the remainder of your windfall against Tesco and Virgin - it can be a bit of an eye-opener.

timbstoke

From a strict MSE point of view, it should be the Cap1. That said, ditching the Next card means your monthly payments to Cap1 can be higher in future because you have less cards. That and the psychological "1 down, 3 to go" would lead me to pay off the Next, and put the rest to Cap1, then allocate Next's monthly payments as an overpayment to Cap1.

Edit: Yes, interest *payments* are higher on Virgin, but pound for pound 17% of £1000 is still less than 26% of £1000. Pay it off the Cap1, and the actual amount of interest you're paying will drop quicker.

DebtFree2012

Thanks peeps - Next has to go - but then Cap1 is highest after that - so that will be my plan - thank you.

Happytogetdebtfree

I agree, all the best :-) nothing nicer than closing an account makes it feel like progress :-) x

mandz1

i agree with clearing next, and cutting the card up and closing the account, then throw the rest at cap1. Then with the money you save from not paying next every month, can go towards another debt.

ixia

Clear next and close the account iw will make you feel good getting rid of one debt and I would pay what is left off capital one.

DrSqueeze

DebtFree2012 wrote: »

Thanks peeps - Next has to go - but then Cap1 is highest after that - so that will be my plan - thank you.

Seems a sound decision, good for you :beer: One less statement / bill per month has got to make you feel better too

fd1972uk

Can't you get a 0% offer or even a life of balance card to get those cards sorted out?


FD