Need advice on extra payment

deliciosa

Just been advised that I will receive about £600 extra on the 10th of February as an adjustment between my permanent and temporary salary. This is a net amount. By then, I will reduce my C1 credit card to 300 so I will pay it off. But I need advice on the following:

a.) I will def. throw the money towards my debt but where? amex is what i use every single day...

b.) should I throw it at HSBC card and try to transfer more balance to the M&S card where the B/T rate is 9% for 9 Months? (I do not have a good credit score so cant apply for 0% cards)

c.) how can I use it most effectively?

I knwo this is basically one question not three but I can't be bothered going back and changing.

I would appreciate any advice!

Many thanks

Maddy

thesaint

Find out which one is charging you the highest % and throw it all at that one.

deliciosa

Thats the Capital One card - I will pay that off but it still leaves me with another 300! (yay, I really cant believe it )

thesaint

If you have £300 left, reduce the balance on the one with the next highest A.P.R. Make sure you have enough money for emergenies though.

KatrinaC_2

deliciosa wrote:

Just been advised that I will receive about £600 extra on the 10th of February as an adjustment between my permanent and temporary salary. This is a net amount. By then, I will reduce my C1 credit card to 300 so I will pay it off. But I need advice on the following:

a.) I will def. throw the money towards my debt but where? amex is what i use every single day...

b.) should I throw it at HSBC card and try to transfer more balance to the M&S card where the B/T rate is 9% for 9 Months? (I do not have a good credit score so cant apply for 0% cards)

c.) how can I use it most effectively?

I knwo this is basically one question not three but I can't be bothered going back and changing.

I would appreciate any advice!

Many thanks

Maddy

I think that it is 1 question phrased 3 different ways.

Without seeing the details of your debts (limits, balances, interest rates) it is impossible to advise properly, however the rule of thumb is to pay as much as you can towards the highest interest rate. Once that is cleared, move the overpayment toward the second, and so on.

Something to be aware of is that once you get a card cleared, you quite often get sent offers for balance transfer rates which are more competative than you will get now. When you clear a card it might be worth holding on to the card (BUT NOT USING IT!) for a few weeks to see if you get any transfer offers better than your 9%.

Kat

artic_fox_2

id throw it at the m&s card so its quicker to get rid of then you will have another one less to deal with will you be snowballing that account with the money you normally pay capital one??

deliciosa

Thanks that's a really really good advice, I will do it. I am so excited!!

I never have money for emergencies... i dont want to save, because the interest on saving is always smaller than the interest on creidt cards?+

deliciosa

thanks artic fox i will do as you said and then they might offer a good deal.. and one more thing, they just increased interest to 17.99! but i will eb starting working for M&S next monday (YES!!)and they might ahve an employee rate, i actually think they do...

thesaint

You are right about the interest on savings not compensating for the amount of interest you are paying for the credit card, but if you had an emergency, what would you do?

If you have friends/family that would bail you out then fine. If you don't, most people would be tempted to make a cash withdrawal on their credit card which ruins the effect of low rate balance transfers etc.

deliciosa

well if I had an emergency I would use my cards... really dont know to be honest, what do people usually do here?

bank_of_slate

Hi deliciosa
Great news about the extra money.

If you really feel you must keep a card, DON"T keep it with you!
Some people have frozen theirs in a block of ice in the freezer, some put it in a sealed envelope in a drawer and write something like "Do you really need it that much?" or the total amount of your debt at it's highest on the envelope.
...Linda xx