What debt to I start to chip away at first?

MrsH070707

Hi all,

New year, new start and all that - need to start tackling some of these debts that are seemingly taking over our lives!

This is what our unsecured outstanding borrowing looks like:

Creditor / outstanding / monthly payment / monthly int rate

Capital One / £119 / £10 / 2.53%
Natwest CC / £263 / £10 / 2.07%
NEXT / £419 / £40 / 2.16%
HSBC CC / £914 / £25 / 2.49%
Argos Card / £1250 / £60 / 2.49%
Vanquis CC / £2490 / £150 / 3.32%
MINT CC / £2980 / £70 / 2.27%
Very / £3368 / £160 / 3.30%
MBNA CC / £1056 / £35 / 2.20%

We make these payments every month however my husband and I might have an extra £200 end of this month from some additional work we took on and Im not sure what it should go towards?

From a motivation point of view it would be nice to get rid of the little debts and actually 'see' a change by getting accounts settled and closed but I am obviously very concious that the larger debts are also the ones with the higher interest rates so would we be better off chipping away at them first?

Should we split it over a couple or concentrate on just one?

Any help or advice gratefully received!

FatVonD

I'm finding it really hard to work out the figures (I think your tabs haven't worked or you've copied from a spreadsheet?) Is there any way you can reformat it to make sense?

ValHaller

FatVonD wrote: »

Is there any way you can reformat it to make sense?

MrsH070707 wrote: »

Vanquis CC ./ £2490 / £150 / 3.32%
Very ......./ £3368 / £160 / 3.30%
Capital One / .£119 / .£10 / 2.53%
HSBC CC ..../ .£914 / .£25 / 2.49%
Argos Card ./ £1250 / .£60 / 2.49%
MINT CC ..../ £2980 / .£70 / 2.27%
MBNA CC ..../ £1056 / .£35 / 2.20%
NEXT ......./ .£419 / .£40 / 2.16%
Natwest CC ./ .£263 / .£10 / 2.07%

Any better?

Sorted into best order for payment. On line tool is http://makesenseofcards.com/snowcalc.html

MrsH070707

Thank you! Sorry, I didn't realise it had come out funny!

[Deleted User]

MrsH070707 wrote: »

Should we split it over a couple or concentrate on just one?

Stick with just one.

Hit the Vanquis one first.

Paying £350 pm, it'll be gone in 8 months, and you will pay just £20 in interest.

Once that's gone, use the £350 pm, to overpay the next highest APR, and so on.

As you move down the list, the amount you will be paying, to the highest APR debt, will increase.

bargainbetty

Alternatively, you could consider clearing the Natwest CC. If you clear the card, you can then contact them about obtaining a low life of balance transfer deal, or even a 0 deal for 12 months.... if you did that, you would be able to transfer a larger sum from a high interest card onto it, thereby reducing the interest charged each month overall.

Then you start throwing all the spare money at the highest interest debts while paying the minimum plus £1 on all the others. If you have a decent credit limit on the Natwest card, you could cut the Vanquis interest charges by over a third!

MrsH070707

Thanks - I am avoiding balance transfers as thats part of the reason I am in this stupid mess :wall:

I think I'll try and get Vanquis cleared first - as you rightly say, as nice as it would be to get rid of Natwest or NEXT, the IRs are comparitively low and hopefully tackling the big ones first will motivate me even more rather than feeling pleased with myself for getting rid of the small ones when I still have lots of work to do!

I feel so much better registering on here and knowing that I am now comimtted to becoming debtfree (eventually!)

beth3735

If the £200 isn't monthly and just a 1 off, i would get rid of 1 rather than split between many. If its monthly I would do as suggested and start on the Vanquis

AFK_Matrix

If its a one off of £200 pay off the Capital One and put the rest towards one of the others.

FallenArcher

Sounds like a one off £200 to me, in that case I'd actually pay off the Capital One, it's one of your highest APRs and you can then close that down, it'll also then free up that £10 monthly payment to go towards the Vanquis. I'd also put the leftover £81 towards the Vanquis. I think with that many creditors it'd be a nice morale boost to clear one. Ordinarily i'd suggest paying highest interest ones off first and working your way down the list, but the interest rates are all pretty low and there isn't much in it.

Good luck with your debt free journey