Credit Card Worry

katecheshire

I agree with CFC. You should not use all your savings to pay this back as you should always have something in reserve (if you can afford to!!).
If you have no other cards and you carry on paying as much as you can spare each month, you will have no problem getting another 0% deal after a year.
Another idea would be to pay the minimum on the 0% M & S card and put any extra money into your savings account. Swap your debt to another 0% at the end of this deal and carry on saving the extra money. Your debt is costing you no interest and your savings will be earning. When you feel like it, pay a chunk of money off your debt.

karatedragon

Ohh thanks both of you. No I am not in my 20s any more. I am 30 years old. My family have always been ones to save and never borrow. My mum and dad would be really judgemental that I have borrowed for this home improvement.

And yes I do worry about unexpected bills so like to ensure things are insured or guaranteed. Nothing seems to be made to last and costs so much to get repaired against buying new again. I have a British Gas plan for the heating and plumbing emergencies and boiler service. Tha washer dryer came witha free 5 year guarantee from Miele but they had a scheme called 5+5=10 for an additional £184 you could "upgrade" the complimentary 5 year guarnatee to 10 years.

I do have one other card. It is a GE money everyday card that gives 3% cashback on my food. I buy food on it and then I just pay that off in full each month.

I do also have a second income but I never count that as part of my overall income. It is not a fortune - normally between say £100 to £250 a month. Any that I get from it is a "bonus" as it is not a regular set amount each month. In the past I have treated it as my pocket money income. Now it will have to go to pay off the debt. When I do the household accounts my second small income is never used as part of the whole picture. I have always thought this was a sensible way. Bit like NOT relying on overtime.

CFC

karatedragon wrote:

I do also have a second income but I never count that as part of my overall income. It is not a fortune - normally between say £100 to £250 a month. Any that I get from it is a "bonus" as it is not a regular set amount each month. In the past I have treated it as my pocket money income. Now it will have to go to pay off the debt. When I do the household accounts my second small income is never used as part of the whole picture. I have always thought this was a sensible way. Bit like NOT relying on overtime.

Very sensible to not rely on it, and it sounds to me like the sensible thing to do is to put that bit of extra income towards the repayment and keep your 2k in the bank for a safety net.

angelavdavis

Hi KD and well done for your post.

Check whether you can get more than 4% for your savings too. Martin's posts will help you compare. Then use quidco to switch so you get a bit of cash too.

SalsaDanca

karatedragon wrote:

any answers to my plans or any better solutions would be welcome

Karatedragon, you must ensure that you make the minimum payment to M&S every month, otherwise they will cancel the 0% offer and start charging you interest. You should call them now, and ask them to set up a direct debit for the minimum payment. Keep sending them a payment until you receive a statement that says they will collect the minimum payment by direct debit. This will ensure that your 0% offer is safe, and you can make additional payments when it suits you.

Assuming that you have only just got the card, you have 12 months at 0%. If you don't use the card again, your minimum payments will be £114 in the first month, and reduce to £80 by the twelfth month, leaving you owing £2,637 on your card. If you use your £2,000 savings to pay, you only have to find another £637 (£53 per month). You might as well pay this into your savings account, and earn some interest on it.

If you keep your savings in an ICEsave.co.uk savings account paying 5.7%, they could earn £100 in interest before you have to pay off the credit card.

suki43

Hi Karatedragon. Your dilemma is oh so familiar. If you come from a family who avoid debt and cc's and such, having debt yourself will feel totally against the grain of who you are. It sounds like you have the age old dilemma of settling your conscience or settling your debt in the most financially sensible way.
My advice to you is to definitely leave the £2K savings where they are, as it sounds like that gives you some peace of mind for unexpected expenses, and it is accruing interest in the same way that your CC is not charging you interest. Pay as much off per month off your CC as you can reasonably afford, allowing yourself money to live and treat yourself as well, to avoid the feeling of being "a slave to debt". This way you will feel best in control of your debt and still be able to afford the things you like.
I would also advise you to be careful that you don't buy every insurance offered to you as well. You are clearly responsible about money and indeed have savings to buy a washing machine if it breaks down. These insurances are all very well, but mainly prey on people worrying about the "what ifs". If you total what you are spending on insurances for this and that, and then research how much the outlay would be if you needed to replace the item, you will get a better idea of whether it's worth the monthly payment or not. You already have the peace of mind you need in the £2K that is in the bank.

karatedragon

Ohh suki43 thats exactly as it is. It is a conscience thing and the worry that you canot pay it all back. I have now set up a DD for the minimum payment for safety!

Ha Ha!

In true MSE style I have been financially cheaky today. My kitchen apliances were cheaper on another website and the place where I got them from matched the price and have refunded me £85!!!! This was even after I have had the appliances a while. What do you think of that?

The washer dryer was £850 and came with a free 5 year parts and labour guarantee. The offer was that for £184 extra you could buy another 5 years on top to get a 10 year parts and labour guarantee. My friend has the same model and had to have a replacement dryer fan and thank god it was under guarantee as the bill would have been £480 plus VAT for the repair!

suki43

Hi karategragon,

Yes it all sounds very familiar. Congrats on the £85 refund, that is fantastic. It all helps to acheive the bigger goal. As I wrote on another thread, I just saved £30 a month for my broadband, TV and telephone with a 15 min phone call, and for exactly the same package! It's been a good day!

Good to hear about the DD - at least that will keep your credit rating good for the future as your account will be managed well - watch out for the increase in credit limit now! It's all how this works. The more in debt you are, the more they encourage you to be. Crazy!

Just relax about the 3800 - it's very manageable for you. Pay off a bit extra when you can, and you will start gnawing away at it.