Am I stupid?

Pecker1210

I have a couple of grand I have saved which I am putting aside for a years time when I have a baby but I have a £900 credit card balance.

Should I pay off the CC now and begin saving or try and save and pay off as and when I can?

It's just that I worked hard to get the 2K and am struggling to let it go!

Thanks

plzhelpmesave!

I'm having the same dilemma! me & Hubby have actually saved about £1k over the past few months (thanks to this site!) and Ikeep tellimg him we need to pay off a card... but he likes the thought of having the money there for a rainy day!

Martin says savings aren't worth it if you're in debt...so if you can - pay off the card. You could start saving again by putting aside the money you are currently paying off on the card.

cnoelj

You pay more on interest on a debt than you earn on interest on savings

I am sure someone who is better at this than me will take you through the maths but it does make sense to clear the debt first

Pecker1210

plzhelpmesave! wrote: »

I'm having the same dilemma! me & Hubby have actually saved about £1k over the past few months (thanks to this site!) and Ikeep tellimg him we need to pay off a card... but he likes the thought of having the money there for a rainy day!

Martin says savings aren't worth it if you're in debt...so if you can - pay off the card. You could start saving again by putting aside the money you are currently paying off on the card.

That is exactly my predicament!!

Millionaire

Pecker1210 wrote: »

I have a couple of grand I have saved which I am putting aside for a years time when I have a baby but I have a £900 credit card balance.

Should I pay off the CC now and begin saving or try and save and pay off as and when I can?

It's just that I worked hard to get the 2K and am struggling to let it go!

Thanks

Yes, Clear the CC balance. Its pointless keeping a balance on a CC and paying for examplr 15.9% interest and having Savings paying 5% interest. Your actually losing money on what you can save.

Those extra pounds that your CC interest is eating up could go towards your savings.

onedayiwill

You know the answer PAY OFF THE CARD!

Then start saving again (and you will be able to save more because no more payments need to go to the card).

Warriorsith

Yes, clear off the CC. Your CC APR will be more than your money earning interest amount.

My OH says the same thing kepp for a rainy dy but in the long run your save alot more money once you've cleared your debt.

fistfullofdollars

Yes you are being silly. Simple maths would tell you you are paying interest on your loans. I know it sucks not having any savings.

Pay debts off first unless your card is on 0% - then you are being clever.

hbl_2

Pay the card, pay the card, pay the card!

I have no savings, but I also have no credit cards. Coincidence?

(well actually i have about £400 in an ISA, but it's locked awaaaaay)

chunky79

Personally i would pay off the card then save again a baby in a years time is a long time off. The CC payments you have been paying already so add that to the savings too.

Garnet_Gem

Pay off the card and save the money you would have spent repaying it. Put the credit card away in case you NEED it for a rainy day but don't spend on it unless you're truly desperate.