Pay off 0% credit card with savings

delmar39

Hi there I currently have around £1.5k on a Nationwide credit card following a small house extension. It's 0% until August. I have a set direct debit to pay off IN FULL by August when the 0% runs out.

However, I currently have £1.5k in savings that could pay off the credit card and free up my current monthly payment of £175.50 to save or do whatever I want with.

What would you do? Keep the balance on the 0% card and pay off leading up to August, or pay it off now with savings?

Just interested in your thoughts.

Thanks

Tixy

In theory in terms of money saving best to keep it and earn interest on the savings.

In reality how much will your savings of £1500 actually earn you in 8months? Once you know that you can decide if its worth it to you to keep the savings, or if you prefer to pay it off so its no longer outstanding.

pmartin86

If the card is costing you nothing then I'd stick with the monthly payments, your savings are earning you interest, paying off the card means no more earned interest and no reduction in costs.

Paul

Any

What would I do? Make sure that the savings are in highest possible interest earning account and either:

-pay off the minimum payment monthly and add the rest into that high interest account to make more money and repay at the end - with being £x better off (the interest earned)

-pay off over the term, learn to live without that money and once the debt is off start putting the £175 pcm to those savings

-pay off minimum amount and perhaps even balance transfer the outstanding amount in the end if I can get lower APR bal. transfer then my savings are making me

But then I am like that... I like shuffling monies around to make monies on my monies.. It makes me happy.
You on the other hand are probably not that sort of person. Otherwise why would you even think about repaying that money now, if it sits at 0%? The ide of debt, even though it is covered is quite possibly putting you off..

In which case if paying it off and not have to think about it ever again makes you most happy, then do that.

delmar39

Any wrote: »

What would I do? Make sure that the savings are in highest possible interest earning account and either:

-pay off over the term, learn to live without that money and once the debt is off start putting the £175 pcm to those savings

In which case if paying it off and not have to think about it ever again makes you most happy, then do that.

Hi thanks for this - useful. In bold above is what I've thought about doing most, but the thought of having no debt is tempting. However, as you and most people have said it's 0% debt and if ever I need to pay it off early, I can do. I also have £220 on another longer 0% deal, again direct debits set to pay off. At the end of each deal all monies will go into either my ISA or high interest regular savings (currently have the Nationwide 6%er).

I also want to increase my mortgage OPs, but not until I've maxed out my ISA.

Before my extension I didn't have these decisions to make (!), but at least I've borrowed using 0% cards effectively.

Cheers.