Order to pay off debts

FinanciallyUnsavvy

Hi all

My debts are as per my signature. The credit cards are both 0% (largest is for 23 months, other is for another 6 months). Not sure what the % on the OD is but I pay roughly £15 a month on fees.

Currently I'm paying £40 a month on CC2, and £160 a month on CC1 - both calculated so they'll be paid off by the end of the interest free period.

Anything left over at the end of the month and anything extra is going towards the OD - approx. £100 a month.

I'm tempted to pay the £229 left on CC2 in one go next month and just pay the minimum on CC1, just so one is totally cleared. That means from March I'll be able to concentrate just on one card and the OD, leaving me more money to put towards CC1 each month = paid off sooner.

Any advice? Thanks.

vics1928

Hi

Have you not looked into a debt management plan

Tixy

Have you tried putting your details in to a snowball calculator to see how much difference it makes to the total interest you will pay? If you enter the debt details and the £300 a month you can afford to pay it should detail the best way to repay.

FinanciallyUnsavvy

vics1928 wrote: »

Hi

Have you not looked into a debt management plan

I have no reason to look into a DMP. I can easily afford my payments.

fibilou1

I would get rid of the small one - it's really satisfying to be able to pay something off in full and cancel the card.

milky1991

fibilou1 wrote: »

I would get rid of the small one - it's really satisfying to be able to pay something off in full and cancel the card.

I agree quick hit and ones gone keeps you more focused, I bet the difference in interest would be in pence rather than pounds anyway.

I would pay off the small one first

FinanciallyUnsavvy

fibilou1 wrote: »

I would get rid of the small one - it's really satisfying to be able to pay something off in full and cancel the card.

milky1991 wrote: »

I agree quick hit and ones gone keeps you more focused, I bet the difference in interest would be in pence rather than pounds anyway.

I would pay off the small one first

Thanks guys - that's what I thought! Since both cards are 0% and both will be paid off within their respective interest free periods, I won't be paying interest either way. It will be nice to see one completely paid off so I think I will do that! :j

Apricot

I'd pay off the smaller card in full just to get rid of it. Tbh I'd probably then only make the minimum payment on the other CC and concentrate on getting the overdraft reduced as that's the only thing that's costing you money at the moment. Agree with testing the snowball calendar though.

FinanciallyUnsavvy

Thanks Tixy and Apricot, I will give the Snowball calc a go.

Whilst the overdraft is the only thing that's costing me, I'm not so worried about it. It's going down month by month so the charge is getting lower every month anyway. Since the main CC is so high I'm worried if I concentrate on the OD first I'll run out of time on the 0% interest before its paid off. Hm, it's something to think about anyway. I'll punch some numbers into the snowball calc and see what that says!

MallyGirl

but if you pay off the OD (as much as you can) while the 0% deals are in place then if necessary you can use it again (for less) once the deals are no more.
I understand the thinking behind simplifying by just paying the min on the big and long term CC to pay off the small one but after that I would hit the debt costing you money - while doing everything to keep other costs down.

MrGreen

I'm repeating a bit of what others have said, I would pay off CC2, that way you have one card/debt dealt with and out of the way.

I've calculated that at £300 p/m you'd have paid off your debts in within 19 months, or sooner if your able to chuck more money at your debts.

From March I'd suggest concentrating on clearing your overdraft, pay the min on CC1 and put the rest of the £300 to pay off your overdraft. You could reduce your overdraft limit by £500 every 2/3 months to stop yourself using it again.

After clearing your overdraft, you'll have enough time to clear CC1, use the whole £300 p/m or more and you'll have paid all three off probably WITHIN 18 MONTHS!