Which do I pay off first?

geographygirlie

Hi
trying to pay off my credit cards as seem to be unable to get an 0% interest card to help me out and wondered which of them I should pay off first.

Done a lot of searching and some places say pay off the biggest balance, some the smallest balance, some the highest APR, some the lowest APR.......

Card 1 - 5700 (29.9% APR - Ridiculously high so I'm in contact with the company)
Card 2 - 3800 (26.9% APR - Also V high so I'm in contact with the company)
Card 3 - 4800 (can't seem to find the APR anywhere!!! 25% ish I think)

Frankly I've no idea which to pay off first!
Any advise please :-)

The_Boss

What are the credit limits and who are the cards with?

Also what is your salary and how much can you afford to pay off each month?

CLAPTON

to clear the debts asap, you pay off the one with the highest APR first although it's best to pay a little more than the minimum on the others, as minimum payments are recorded on your credit files.

[Deleted User]

The general advice is to overpay the highest APR first, and for good reason.

With Card 2, paying 2.5% of the current balance, per month, will cost you £5,204 in interest, over the period it will take to clear it.

With Card 3, paying 2.5% of the current balance, per month, will cost you £5,080 in interest, over the period it will take to clear it.

As you can see, even though card 3 has a higher balance (£1,000 higher), you pay less interest than card 2, hence overpaying card 2 saves you more in interest, than overpaying card 3.

The same applies to overpaying Card 1, in preference to card 2 or 3.

If I were you, Id hit card 1 with any spare cash (while still maintaining minimum payments on the others), then move the overpayments to card 2, when card 1 is cleared.

geographygirlie

The_Boss wrote: »

What are the credit limits and who are the cards with?

Also what is your salary and how much can you afford to pay off each month?

2 cards with Barclaycard (one used to be an egg card) and a mint card. Salary is £43K and currently pay Card 1 - £5700 pay £150, Card 2 - £3800 pay £150 and Card 3 - £4800 pay £110. Already pay more than minimum on the Barclaycards but minimum on mint.

The_Boss

CLAPTON wrote: »

to clear the debts asap, you pay off the one with the highest APR first although it's best to pay a little more than the minimum on the others, as minimum payments are recorded on your credit files.

Generally the best idea. I'm interested to hear a bit more though in case it's best to pay off card 2 first and try for a 0% balance transfer.

EDIT : having seen the details now I agree : pay minimum repayment plus slight extra to cards 2 and 3 and focus on paying off as much as possible on card 1.

Anybody got a link to the snowball calculator? That would help the OP to see.

YorkshireBoy

You must still be using these cards, or until fairly recently?

To have such high limits, yet such high APRs, you must have been rate-jacked at some point over the last couple of years or so and not taken the option of closing them off to new spending?

YorkshireBoy

geographygirlie wrote: »

Card 3 - 4800 (can't seem to find the APR anywhere!!! 25% ish I think)

See your statement. If it doesn't show an APR it'll show a monthly rate. What's that?

[Deleted User]

OK, at your current rates of payment, it's going to take you 67 months to clear all the cards, and cost you £13,164 in interest.

How much extra can you afford to pay, toward the debts, per month?

geographygirlie

YorkshireBoy wrote: »

You must still be using these cards, or until fairly recently?

To have such high limits, yet such high APRs, you must have been rate-jacked at some point over the last couple of years or so and not taken the option of closing them off to new spending?

Never used Mint card, stopped using 1 barclaycard in Jan 2013 and the other in May 2013. Yes I have been rate-jacked and not had any communication about it. That (and a large number of other complaints) is being dealt with by Barclays at the moment......in week 7 of the 8 they said they'd deal with it in!

geographygirlie

Bedsit_Bob wrote: »

OK, at your current rates of payment, it's going to take you 67 months to clear all the cards, and cost you £13,164 in interest.

How much extra can you afford to pay, toward the debts, per month?

Approximately another £150-200 on top of the £410 I'm currently paying.