Use shares to pay off debt?

BFG1980

Hi all,

Apologies, i am pretty sure this will have been answered before...

I know it makes sense to use savings to clear debt, but I was wondring if this logic also applies to shares?

Through work awards I have got approx. £3000 of shares, and around £5000 of debt (credit cards). Thankfully I am now in position where my debt is shrinking, but I wasn't sure if I should sell my shares to clear some of the debt...the dividend on the shares worked out at approx. 1.1% interest for last year, so clearly the credit card interest is more expensive, however as I say, I wasn't 100% sure if the same logic applied to shares as to savings.

Many thanks in advance for any help/advice! :beer:

CK

TeamNicholson

I have just sold my shares through work to pay off some debt, its not as much as yours but whilst I am paying 29.9% on some debt its worth it for me.

DVardysShadow

The logic is the same - it is the data which is more difficult. Your dividend may be 1.1% but it is likely to be vastly outweighed by capital value swings either up or down. If you have debt at 25%, unless you think the shares are likely to go up up and away, you might prefer to sell.

tallyhoh

Sell! Sell!

[Deleted User]

def.sell and pay off debt

BFG1980

Thanks all, always nice to have people confirm what you already suspect...

andymc29

Definitely sell. One way to look at it is to reverse it.

Would you put £3000 on your credit card in order to buy shares?

Normally people would say no, so this is the same thing. Sell the shares and pay against the card.

National_Debtline

Hello there.

If you do decide to sell your shares you could see if your creditors would accept a 'Full & Final Settlment'. This may allow you to clear your debts in full but do so by making only a part-payment to them. We've a useful fact sheet outlining the process here:

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=24_full_and_final_settlement_offers

Best wishes,

National Debtline.