Emergency savings or pay off some of CC

rozjames1985

I have £1000 in savings which I was keeping for emergencies, say if the car broke or something in the house.

I have £7600 on a CC, 0% until May, should I pay off the £1000 on the CC and if I do need some money use the CC?

BTW I am looking around to move the £7600 onto another card.

quantic

Sorry if this sounds really negative but personally I have always felt that any savings that are held while you have debt is really just kidding yourself. Its also a very expensive way to feel like you have some money, especially if you are paying interest on the debt.

curlytop12

if the CC debt is at 0% and you are gaining interest on the savings,thats good.

if however you have to pay interes on the CC after may,then get the balance down as much as possible.

afoolandhermoney

Hi RozJames - I was in a similar position last year (but with less debt and more savings). Although the general advice is to pay off debts with savings, I needed the psychological buffer of having some money in savings as I was concerned about redundancy.

In the end I kept my savings, and found that the "crutch" of having them there made upping my debt repayments that bit easier. I'm now debt free (card statement arrived yesterday confirming it) - barring the mortgage - and am now adding to my savings. Although I could have been debt free four months ago if I'd used my savings, I personally couldn't have coped if a big expense came up and the stress of how I'd cover the mortgage if I did lose my job just wasn't worth it.

Its a personal decision at the end of the day
Best of luck in your debt free journey.

rising_from_the_ashes

rozjames1985 wrote: »

BTW I am looking around to move the £7600 onto another card.

Is this a card you already have ..... or were you thinking of applying for another 0% card?

The answer to this is actually quite important - if you've space on a current 0% card that will accept a transfer then that's great but if not I'm afraid I think it's unlikely you'll get another 0% one due to the ratio of your income / debt level (sorry).

If the latter is the case, save as much as you can between now & May and then use that to clear the card where the 0% is ending.

rozjames1985

If I don't find another 0% cc I'll use the £1k, but I think the post office cc I have has a 0% interest balance transfer.