Moving Forward

jiirtih

Hi

I hope some of you can give me a bit of advice about the best way to tackle my finances!

I am 24 and working full time. I take home around £1200 p/m and I'm slowly paying down my credit cards etc. Had a bit of a nightmare around 6-12 months ago which involved missed payments etc but for the last 6 months I've been spot on with all my debts.

Current picture is this:

MBNA Loan - £2000 (paying £60 p/m) Limit: £3200
Barclaycard - £900 (interest free for another 18 months, paying £50 p/m) Limit: £1000
Bank loan - £5000 (£3500 remaining at £124 p/m)
Overdraft - £2000 Limit: £2000 *19.89% variable p/a*

I'm getting a christmas bonus of £1k pretax and I want to use this in the most effective way. I am also considering approaching my bank to consolidate all but the Barclaycard.

Am I better off paying the bonus off the CC, or off my o/d?

Thanks for your help

chris175

I was in a very similar state to yourself and personally I concentrated on the Overdraft first. ( I had 2 credit cards, a loan and overdraft of similar amounts to yourself)

I found being on my overdraft limit was very restrictive in terms of applying for credit. Although it takes more discipline as you'll have an available balance.

With you overdraft gone you'll hopefully have a better credit rating and may be able to either get a 0% or low interest credit card to transfer the credit cards onto, or, like I've just done, get a loan to cover the cards and close them down.

May noe be the best advice you'll get off this site but it's worked for me!

Good Luck!!

antonia1

Hi, you are generally best paying of the debt which has the highest interest rates. Of the CC and o/d you would be better paying off the overdraft, as at £50 p/m you will have paid off the balance before the 0% deal ends. Use the snowball calculator here to see which debts to pay off and in what order:

http://www.whatsthecost.co.uk/snowball.aspx

If you want to pay more off, complete an SOA, post it here and the nice people on the forum will see if they can make any savings.