confused seeking help cards/isas/current - with everything basically!

bertrude

Hi folks,

I'm after a little advice to sort my finances out! I have approx £1000 on a card that is about to finish it's 0% interest term - do i pay this off with the £1000 i have in an ISA or just get abother card - think i'm more likely to start saving again rather than pay the card off!

My other option is that I'm a postgrad student and employed full-time so have been able to open a student acccount with 0% overdraft, so i could put my card debt in here..what do you think? I use a different current acccount for my salary (an all&Leic one as it had good terms when first opend 18months ago). Is it stupid to have more than 1 current account? I also have £500 on a different card - this is just a normal visa card that i've had with my bank for years but have just put this money on it recently.

basically i am just very confused and so any advice would be greatly appreciated!

Many Thanks

BrunoM

The important thing is to put any debt where you're paying least interest, and any savings where they're earning most interest (without jumping through too many hoops to do it!).

If you can easily get another 0% card which would take your outstanding card balances, then obviously you transform your debt from being £1500 that's costing you anything up to 19% APR, to £1500 costing you nothing for the term of the intro offer. I.e. you save money straight up, no messing. The potential downsides around this are

a) you might get declined for a card depending on your history
b) you'll need to pay the monthly minimums (this can also be an upside as it reduces the total debt!)
c) you have another card which you can get further into debt on if you are silly!
d) potentially another credit check and another source of credit might damage your chances of e.g. getting a mortgage or large loan in the near future, but this is easily minimised (cancel old cards etc)

0% graduate overdraft - this might be the easiest way in the short term of clearing up those dangerous card debts, but it will still be a debt that at some stage needs clearing and can't be just forgotten about

One potential other course could be a low-rate "life of balance" transfer card, which you might get e.g. 3.9% APR on your debt without an expiration date on the deal. This might be a marginally better deal than clearing the debt from the ISA, depending on exactly which card and what deal.

The money in the ISA is good, it's the best way you can save, but it earns you a lot less in interest than the credit card debt will if you just leave that debt where it is. If it comes to a choice between your debt costing you ("normal" i.e. more than 4% or so) interest each month, or paying it off from the ISA, pay it! At some point you'll have to

*far from an expert here, just bored at work so taking the time to share the way I think*

chevalier

I would have thought that the interest rate on the ISA is less than on the credit card/ then you would do best overall to pay the one off with the other
chev

CLAPTON

the simplist way of dealing with finances is

a. pay off all debts
b. use a credit card only for convenience or cashback and set a DD for the full amount for each month. aim never to pay any interest.
c. set up a budget and monitor it regularly (this includes all the annual and one off costs ..holidays/xmas/big ticket items )
d. save for all big spends rather than use CC.
e. start saving asap for mortgage and an emergency fund as well as those annual/oneoffs.


unless you are very well organised and what to stooze ... then look at https://www.stoozing.com, but only if you feel you want to spend the time and incur the bother.