What should I do?

djdymond

Morning everyone, hope your all well

I'll make this as quick as poss.

me and my other half are saving to buy our own place. so far we have 5 thousand saved. I have a credit card ive had since i was about 18 (im now 24), and it now has 2 thousand on it.

obviously so far, we wanted to save as much as poss, as quick as poss and the card wasnt being paid off. since new year Ive decided lets put saving on hold, slowly clear the card.

so the question is, do i just use 2k of saving to clear the card, get it out the way, and stop having to pay interest (which last statement was 57 pounds!) or do i not touch the savings (as we really dont want to touch it!) and just pay off the 400 or so pounds a month (which obviously each month, were still paying interest)

its just a horrible thought for me and my partner to see our well earned 5k go down to 3k! but it WOULD mean we could concentrate on savings and throw all money at it.

(i tried to get a 0 per cent card to transfer the balance over, but mint would only give me a card with 1.5k on it and i dont want 2!!!)

i DID think about using just 1k of savings to at least bring the cc debt down but to be honest im an all or nothing girl and would just rather clear it!

It does sound like Ive answered my own question but any advice would be great!

Thanks everyone!

Helena

thesaint

Although it looks good to have it as savings, it is a false amount of savings.

You are more than likely paying more in interest on your credit card than you are gaining in your savings account.

hypno06

If it was me, I would use the savings to clear the credit card, then up your monthly payment to the savings account and it will be back up and beyond your original £5000 balance before you know it!

The satisfaction in having no credit card debt should be far greater than the disappointment in seeing your savings drop.

mjdh1957

It's never worth having savings while you're in debt (apart from emergency funds) because the interest you pay is much more than the interest you receive.

But if you can get a 0% card, it would make sense to transfer as much as you can to it, and pay off all the remaining credit card debt (then close the account and cut up the card). Then you could pay the minimum for a while, add to your savings and when the 0% expires pay it all off out of the savings.

Hope that makes sense!

sandralovescats

What about transferring the 1.5K to a 0% card, paying off £500 in cash then using all the DFW tips here to get rid of the £1.5K debt?

That way you still keep your £4.5K - which is a big morale booster - but are still getting somewhere with both.

Just a suggestion.

CLAPTON

if the APR you are paying on the CC is higher than the net interest you get on the saving account then pay off the CC immediately..otherwise you are throwing money away.

djdymond

thanks everyone for such quick responses! i think its time I get rid of this card!

thesaint

I think everyone was typing away at the same time!

I should do some work really.

Maybe later.