Which do I pay off first?

[Deleted User]

Thanks for that YorkshireBoy, but not quite what I was looking for.

CC statements state the minimum monthly payment as a percentage, such as "2.25% of the balance".

By entering those percentages into the Snowball Calculator, you can get a month by month figure, for how much to pay on the each of the cards, allowing you to maximise the payment to the highest APR card.

YorkshireBoy

Bedsit_Bob wrote: »

Thanks for that YorkshireBoy, but not quite what I was looking for.

CC statements state the minimum monthly payment as a percentage, such as "2.25% of the balance".

It's not as easy as that these days, with most cards now having a "whichever is greater" clause. For example, Barclaycard is...

2.25% of the statement balance, or interest plus 1% of the balance...whichever is the greater.

And the ex-Egg card is...

2% of the statement balance, or interest plus 1% of the balance...whichever is the greater.

Because the APR on both cards equates to a monthly rate of around 2%, it follows that interest (of 2%) plus 1%, ie 3%, will always be "greater" than 2% or 2.25%.

I just gave the result earlier, not the 'working out'. Hopefully that clears things up for you?

planteria

establish all rates, and pay of the highest first. just get very organised and systematically work through clearing the debt as quickly as you can.

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.

is this right? i read people making this point, but my understanding is that minimum payments by Direct Debit have no detrimental effect at all.

planteria

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?

very good point.

planteria

i would be interested, if i were you, to know that the minimum % repayments are, but just for interest. i would reduce the minimum payments to as low as they will go on the two lower rates....and channel all of that, and a bit more, somehow, onto the highest rate.

perhaps you want to give us the Provider, Limit and Balance of all 3 cards together:)

perhaps, by clearing 1 of the Barclaycards, you might be able to get into a better position.

[Deleted User]

Any chance you can move some of the balance from card 1, onto the space available on cards 2 and 3?

There's not a huge amount of space (a little over £1,000) on the two lower cards, but as the saying goes, "Every little helps".

CLAPTON

planteria wrote: »

establish all rates, and pay of the highest first. just get very organised and systematically work through clearing the debt as quickly as you can.



is this right? i read people making this point, but my understanding is that minimum payments by Direct Debit have no detrimental effect at all.

my point is that minimum payments are recorded on your credit files : whether a potential credit supplier make a negative association is a function of their (secret) credit scoring system.

planteria

Bedsit_Bob wrote: »

Any chance you can move some of the balance from card 1, onto the space available on cards 2 and 3?

There's not a huge amount of space (a little over £1,000) on the two lower cards, but as the saying goes, "Every little helps".

that's why i was thinking that clearing 1 Barclaycard first could help...pay off 1, then get them to take the Mint debt over at 0%? perhaps not. but trying to juggle would be my approach.

planteria

CLAPTON wrote: »

my point is that minimum payments are recorded on your credit files : whether a potential credit supplier make a negative association is a function of their (secret) credit scoring system.

is there any evidence that it is worthwhile to pay more than the minimum, in terms of ratings? i have always paid either 'full' on a spending card or 'minimum' on a balance transfer card...never anything in between. i think gg should focus all spare funds on the highest rate, not paying over the minimums for any hope of improved ratings. but im open to being shown why that would be wrong.

CLAPTON

planteria wrote: »

is there any evidence that it is worthwhile to pay more than the minimum, in terms of ratings? i have always paid either 'full' on a spending card or 'minimum' on a balance transfer card...never anything in between. i think gg should focus all spare funds on the highest rate, not paying over the minimums for any hope of improved ratings. but im open to being shown why that would be wrong.

I operate on the 'precautionary' principle as one doesn't have perfect (or any?) actual knowledge of many of the lenders' internal procedures and rules.


so never go over 60% of a credit limit
never leave paying until the last moment (unless DD)
always pay more than minimum even if only a few pounds
always carry 2 cards if crossing the road
if going further then carry at least 3
don't mess about changing pay dates or credit limits
etc etc