Nearly debt free!

Mimi_Arc_en_ciel

Hi,

I got a credit card towards the end of last year and put part payment of a holiday on there. It is interest free until dec 2013.

Outstanding at the moment is £1k, Have paid back £500 since November. This is the only debt I have.

Now the question I have for you is this..... Do i scrimp and pay this off before the end of March (Which i can do)

Or should I just increase monthly payments and have it paid off before the end of the year?

The reason for this question is because I am wanting to buy a new cooker at some point in the near future. Am not sure whether to stick that on the CC and pay it all off with monthly payments or pay of the CC then save for a cooker (My seals have gone on the one im using!)

Sorry - I know this isnt a drastic thing, I just cant make my mind up about what to do!

(P.S - CC is getting cut up when its paid off )

IoweIowesoofftoworkIgo

Can't you repair the cooker? Far cheaper than buying a new one.

unoriginal_uk

I suppose it depends whether you want the debt hanging over you or not. If it was me I would rather pay it off as soon as possible to get rid of it, then save any extra I would usually use for repayments in a separate pot to then be used to fix the cooker/buy a new one.

It also depends I guess, on how urgent the cooker issue is - If you can see yourself needing to fork out money on the cooker in the next few weeks then I would set some money aside now for that so you don't have to put it on the CC also.

Willing2Learn

If it was me, I'd probably do it the other way round and put the new cooker on the card while it's on 0%, then I'd put the corresponding amount into a savings account to earn a couple of quid and finally repay the card balance (via transfer from savings a/c) just before the APR goes up. It would only generate a few pounds interest but it's very MSE and wonderfully nerdy and geeky!

Edit: Three totally different answers for you to consider OP. Confusing huh?

Mimi_Arc_en_ciel

IoweIowesoofftoworkIgo wrote: »

Can't you repair the cooker? Far cheaper than buying a new one.

It's an old cooker and looking online i would need to buy a "universal" seal which I am not sure will fit correctly anyway.

Plus - knowing me I might end up glueing myself to the damn thing :rotfl:

Was going to flog mine on Fleabay (never know might get something for it!) and use that money towards the new one.

unoriginal_uk wrote: »

I suppose it depends whether you want the debt hanging over you or not. If it was me I would rather pay it off as soon as possible to get rid of it, then save any extra I would usually use for repayments in a separate pot to then be used to fix the cooker/buy a new one.

It also depends I guess, on how urgent the cooker issue is - If you can see yourself needing to fork out money on the cooker in the next few weeks then I would set some money aside now for that so you don't have to put it on the CC also.

I have £150 saved up at the moment (I have zero savings usually - Was going to get myself an ISA this year with the money i have been saving)

I'm thinking along the lines of I have no other debts than this, no OD etc. I am not going to be going for credit for anything (rent my house, no intentions of buying for the foreseeable future) and as it is 0% I'm not going to be paying any extra on it.

But again - I have the same thinking - its a debt, i should get rid - which is why i am confused about what to do lol

Willing2Learn wrote: »

If it was me, I'd probably do it the other way round and put the new cooker on the card while it's on 0%, then I'd put the corresponding amount into a savings account to earn a couple of quid and finally repay the card balance (via transfer from savings a/c) just before the APR goes up. It would only generate a few pounds interest but it's very MSE and wonderfully nerdy and geeky!

Edit: Three totally different answers for you to consider OP. Confusing huh?

yes - completely confusing! and I'm still non the wiser about what to do but thank you for the reply

de_g.

I'd take the WillingToLearn approach.

Remember also, electrical retailers have a nasty habit of going into administration at the moment; purchasing it on a credit card will protect you should they fail to deliver.

Fosterdog

I'm another one who would buy the cooker on the CC while it's interest free, it's the sort of purchase that you may need the adder buyer protection for.

I would then either pay the minimum payment every month or slightly higher and keep the rest in savings to pay off before the APR kicks in or you save enough to clear the full balance sooner.

Mimi_Arc_en_ciel

Well the cooker I have seen is out of stock until the end of the month but I can pre-order it so i think i will probably put it on the CC just to be safe. Completely didnt think about the store going into Administration (not very mse today am i!)

Thank you all for the replies. Much apprechiated.

Willing2Learn

Mimi_Arc_en_ciel wrote: »

I'm thinking along the lines of I have no other debts than this, no OD etc. I am not going to be going for credit for anything (rent my house, no intentions of buying for the foreseeable future) and as it is 0% I'm not going to be paying any extra on it.

But again - I have the same thinking - its a debt, i should get rid - which is why i am confused about what to do lol

This all depends on your approach to using a credit card. It only becomes a 'ball and chain debt' if you don't pay the balance. I never make a purchase on a card if I have not budgeted for the cost from my monthly income/expenses spreadsheet. This ensures I can clear the balance before I was charged interest.

In your example, you have £150 already saved. This is hopefully earning you 4% interest in something like the N&P regular savers account. If you deposited £30/month into this account for the next 10 months then you would have £450 saved (plus interest) by December. You then pay off the balance on your card and earn interest during the process (only something like £3-£4 off the top of my head but better than nothing)

It all depends on how disciplined you are, how well you can manage your accounts.

de_g. wrote: »

Remember also, electrical retailers have a nasty habit of going into administration at the moment; purchasing it on a credit card will protect you should they fail to deliver.

Ooh...I never even considered that...Very good point!


Edit: Mimi, don't forget to go through cashback sites and/or search for vouchers to get the best possible deal.

Mimi_Arc_en_ciel

You would be surprised how shockingly cr*p my interest rate is on my savings account lol This is why I have started to save ready to transfer it into an ISA in April (didnt see the point in opening one now, doubt it would earn much!)

Cooker i have seen is at currys - am working on getting it cheaper (Currys is cheapest so far - cash back rate is only 1.5% though!)

i know what you mean about the "ball and chain" debt. Finance wise, I'm learning lol I dont have any debts other than this one but I tend to spend rather than save but my new years resolution was to start putting something away... so far so good lol

Thanks for your advise Willing2Learn - its much appreciated