finally paid off credit card ...

silvy_2

Hi! Inspired by all you confidently money savvy people today I've paid off my natwest credit card, with much scrimping and saving.

I have an incredible feeling of elation as it has been the subject of much paranoia for years. But I have a couple of questions.

Should I now cancel the credit card? It is the only one I have and I probably do need to start to rebuild my credit rating, but at the same time it has very bad emotions attached to it.

Also I have a direct debit to pay off the minimum interest on the card which now seems pointless, as there's nothing left to pay off. If I cancel the direct debit, do I need to inform Natwest Mastercard?

Thank you for any advice!

JournalGirl

First...WELL DONE

If you can trust yourself, then change the DD to pay off complete balance, and use the CC for a small grocery purchase every month.

Knitting_Nora

Hi Silvy

That's fab news - congratulations!

tintoys

I love reading these inspiring posts, your hard work has paid off, what a weight off your mind, well done!

opinions4u

Next suggestion:

Start saving. Whatever you were paying off the card and more if possible. Get a contingency fund in place. 3-6 months net pay.

Then when one of life's little nasties hits you the opportuniy to dip in to savings works out cheaper than building up a new credit card debt.

silvy_2

Thank you, :beer: I can't believe I've done it (though I am very conscious that I got myself into a silly situation that I'm not going to repeat). I realise now that the minimum balance I was paying each month will do well to be in a savings account.

Part of me thinks I should just cancel the credit card immediately, the other part of me thinks I should rebuild my credit rating by using it once a month and then paying it off immediately (I don't have another credit card and I doubt I would be given one again as things stand). I cancelled the minimum balance direct debit because there is nothing to pay off at the moment (I am hoping that will be OK?).

Decisions ...

Bosie

Yes Congrats:beer: It is a great feeling, nothing worse than a debt as we know it can become a prison:mad:
I try and always put a few pounds away each week, feels good to have some savings!

closed

have you paid off everything, including accrued interest?

better to change it to pay of full balance, and keep it for emergencies

malcolmffc

Use it at a supermarket once a month to buy a chocolate bar or something, and pay it off.

silvy_2

I think I have paid off all the accrued interest also - I had been paying off interest-only each month before my drive to get rid of the balance, but the full amount had not been paid off.
Do I need to check this with the bank (though I suspect that there is going to be some kind of statement indicating that it's paid off, to soon for that now). Will there be some kind of invisible accrued interest I am going to be suddenly landed with? Terrifying thought!

izools

There will be rolling interest to pay next month, yes. Perfectly normal.

My advice is to ask the bank to drop the limit to the lowest they allow (Probably £250 or £500) and set up a DD to take the full amount each month. Then simply use the card for a bottle of milk or loaf of bread each week to keep the account active. This way you'll continue to appear credit active and maintain your credit history.

There's an untrue myth that a low limit card will look "bad" on your credit file as other creditors will assume it is a sub prime card and you must be bad with money - this is absolute tosh. My OH has only one credit card active on his credit file with a £500 limit and has just been approved for a Nationwide & Post Office C/Card.

Good luck with your future savings and again well done for clearing your debt! :beer: