Extra payments

ollow

I've seen various threads on making extra payments daily/weekly etc off debt.

Could somebody tell me how this works?

I understand that your paying more off but does it help clear the debt quicker? I.e £1 a week = £52 extra a year. Is interest charged daily/monthly?

I have 2 cc one with about £3000 on 0% and one with about £400 17% ish.

I'm about to pay off 2 of my debts today so the above is all I have left to pay.

Sorry just having problems figuring it out.

GeorgieFTB

On my cc the interest is worked out daily and added on monthly so if you pay off £20 at the beginning of the month that £20 doesn't get interest charged on it so you have a quid or so less to pay out in interest.

In your situation throw as much money as you can at the £400 cc then pay the 0% as its not costing you anything.

Gx

anh1904

but always make the minimum payment on a 0% card so they don't end the promotional rate.

Boris_Allen

Interest is almost always calculated daily, although normally added monthly/annually product dependent. If you make 52/12 payments per month rather than one payment for the same combined sum at the end of the month, you'll pay less interest overall.

Boris_Allen

Only just saw the 0%.

Yeah I concur with the above advise - spend spend spend on that card, pay off as much as you can of the other card as soon as possible

anh1904

At 15% APR (quite low) £1 paid off now, is "worth" £1.15 in a year, £1.32 in two, £1.52 in three, £1.74 in four, £2.01 in five, £2.31 in six, £2.66 in seven, £3.05 in eight, £3.51 in nine and £4.04 in ten years

The rules of compounding, pay as much as you can, as early as you can ... or better still, borrow less in the first place.

ollow

Thank you the 0% card is a balance transfer. I don't think I've got any 0% to spend on. I always pay above minimum payment if bill is £28.89 I'll either pay £30/35 I've always done this. At the moment both payments are under £30 and I'm paying about £50 per month on each.

GeorgieFTB

ollow wrote: »

Thank you the 0% card is a balance transfer. I don't think I've got any 0% to spend on. I always pay above minimum payment if bill is £28.89 I'll either pay £30/35 I've always done this. At the moment both payments are under £30 and I'm paying about £50 per month on each.

Pay £30 on the 0% and £70 on the other card, this will save you money in the long run...

Gx

ollow

Thank you. I'm due to make payments in the next week so I will pay more off interest card and less off 0% then chuck everything at 0% when other balance is gone. I have two months where I don't need to pay my water bill soon so I will also pay that off cards.

psychopathbabble

Most of my debt has been paid off since joining these threads... before I thought i never had any spare cash but doing these challenges has proved otherwise. It certainly decreases the amount of interest you pay and all these extra payments brings your debt free date forward every time.

ollow

Thank you I have joined an extra payment a week and made my first payment only £1.35 but hey it's gotta help.