Credit card at 0% or savings fund - Which looks better?

Any

ING direct has 2.8%APR tax free
http://www.moneysupermarket.com/savings/cash-isas/

JimmyTheWig

pmartin86 wrote: »

Ok that sounds amout the sort of thing id want, as posted above id be looking to pay £115 a month.

Perfect.

But this...

What about access? As I've only just become fincialy stable I'd like to be able to get at it should it be needed without a massive penalty

... means a regular saver isn't for you. One of the reasons they can afford to give you the high rate is that it guarantees them the money for the whole term.

I've been looking at this account

http://www.natwest.com/personal/savings/g1/instant-access/e-savings.ashx#

As im allready a natwest customer, does that seem like a reasonable place to use? Am I right in assuming I'll basicly get 0.234% Monthly interest on my monthly balance?

Correct.
It's the Best Buy from this article...
http://www.moneysavingexpert.com/savings/savings-accounts-best-interest
... which suggests it's a good one to go for.

Unless you want an ISA, in which case have a look here: http://www.moneysavingexpert.com/savings/best-cash-isa

pmartin86

Ok, so we've established that a regular saver isnt for me, at least not yet, and an ISA or an instant saver is the way forward. What is the difference between the 2? Is it purely the savings limit on the ISA and the fact its tax free?

Sorry once again for my ignorance, but this is the first time in my adult life ive ever been close enough to debt free to even consider saving!

Regards
Paul

Sheriffsam

pmartin86 wrote: »

Hiya

First off, time to do the happy dance :j! I was accepted for a new Barclaycard yesterday with a 0% rate on balance transfers for 23 months meaning I now no longer have to pay interest on my Credit Card bill. Now that the pressure if off (I was paying every spare penny I had into paying it each month) should I continue to plug away at it, or should I look into opening a savings acount and making the minimum payment each month? Basicly this is my last debt and I'm looking to start saving for a house deposit, what would be my best option in the eyes of a future potential morgague lender? If i have savings of x amount but its taken 23 months to pay off a CC balance or pay off the CC balance over the next 3-4 months and THEN start saving?

Regards
Paul

Paul,

Most important thing to think about is not missing a payment.

Mortgage companies will not care too much that you have outstanding debt on a credit card.

When making their calculation on how much you can borrow, they will deduct the amount you have outstanding from the loan they would offer, more often than not.

My advice would be to save save save. If you get to the end of your BT and you cannot transfer again, then use the money you have saved to pay off the remaining balance.

Only paying minimum payments will not make you look desperate to a mortgage lender, they will not even take this into account. All they will want to see on your appliacation is your balance, limit and lending institution. Thats it.

So save.

Sheriffsam

pmartin86 wrote: »

Ok, so we've established that a regular saver isnt for me, at least not yet, and an ISA or an instant saver is the way forward. What is the difference between the 2? Is it purely the savings limit on the ISA and the fact its tax free?

Sorry once again for my ignorance, but this is the first time in my adult life ive ever been close enough to debt free to even consider saving!

Regards
Paul

PS, and ISA is a tax free savings account. Check out the best rate on the MSE website. This is better for you to save for your property deposit.

pmartin86

Thanks Sheriffsam - Paying off the remaining balance will not be a problem, the only reason it exists in the first place is because I was out of work for nearly a year, I'm now in a stable job (Local Authority Worker) and I can comftably afford £200 a month spare from my salary, so paying back the £1000 owed over 23 months is easily acheivable.

I'll be looking into the ISA listed on the main page of this website I think, thank you all for your helpfull comments and advice, it's all very mcuh appreciated!

Regards
Paul.

JimmyTheWig

pmartin86 wrote: »

an ISA or an instant saver is the way forward. What is the difference between the 2?

The difference between an ISA and a savings account is the wrapper. An ISA is a savings account in a tax-free wrapper.
You can get regular saver ISAs (I believe), fixed term ISAs, instant access ISAs, etc, just as you do with savings accounts.
If you are a taxpayer then it generally makes sense to use your ISA allowance.
You have to stick to the limits, which should be fine for you, but other than that a cash ISA works the same as any equivalent savings account.

lifebeginstoday

Sheriffsam wrote: »

Paul,

Most important thing to think about is not missing a payment.

Mortgage companies will not care too much that you have outstanding debt on a credit card.

Only paying minimum payments will not make you look desperate to a mortgage lender, they will not even take this into account. All they will want to see on your appliacation is your balance, limit and lending institution. Thats it.

So save.

Have to disagree slightly with that Sam Mortgage lenders are tightening up and only making minimum payments, which will show on your Credit Reports can be seen as financial distress.

For the sake of paying a couple of extra pounds a month is it really worth the risk;)

thriftymomma

lifebeginstoday wrote: »

Have to disagree slightly with that Sam Mortgage lenders are tightening up and only making minimum payments, which will show on your Credit Reports can be seen as financial distress.

For the sake of paying a couple of extra pounds a month is it really worth the risk;)

I would definitely agree with this. They note whether only the minimum payment is met, for a reason!