What to pay first?

fed_up_of_debt

Well paid off the £109.25 which I spent on Mint Card:o So although made a payment - balance still the same:mad:

Paid an extra £50 of my loan and have the payment for this month sitting ready in the bank:)

Paid £25 off Halifax - Will feel better when that one is gone - anybody else want to get rid of the smallest first? Somehow they feel as though Im achieving something ( even though interest wise its probably not the most cost effective!)

Paid £25 off Flybe

Found myself wishing my life away... counting days to payments etc!!

fed_up_of_debt

Paid £5 off Halifax today, working hard and no time to get to bank:mad:

Want to sell stuff, dont like the charges on ebay - anyone used cash converters?

Mara_uk7

Try your local facebook selling pages, no commission, no postage fees, everything has to be collected and hard cash handed over. Ive both sold and bought on there and it worked great.

Imma_Number

Hi,
I just happened by and I saw you are paying ~£20 per month for Santander. You may not be aware that they are changing their overdraft charges from 19th August 2014. They are keeping the £1 per day but removing the £20 cap. http://www.santander-products.co.uk/accountchanges/

Assuming you are overdrawn for more than 20 days per month it'll end up costing £10-£11 more per month. Unfortunately it's £1 per day regardless of the balance which makes the effective interest rate worse as it's paid off.

Sorry to be the bearer of bad tidings. Hopefully forewarned is forearmed.

Imma

fed_up_of_debt

Thanks, No I didnt know about overdraft charges changing.:eek: I think that I will have to channel spare monies to the overdraft.

I feel like a dog chasing my tail!

As much as I pay - I dont seem to be getting anywhere fast - but you are right, I ve got a couple of months before the changes so maybe I will start selling stuff and see if I can get rid as fast as possible.

JimmyTheWig

What is the balance on your Santander overdraft?
What's your overdraft limit on that account?
Does money come in and go out of the account often (i.e. do you use it as your main current account) or is it just a debt that you are paying off?

fed_up_of_debt

Hi JimmyTheWig - the balance is £1500 overdrawn and that's the limit too:o

I pay in each week / month to pay direct debits and include £20 month for overdraft fees.

I have a loan that goes through it £159.88 mth and 2 monthly mobile phone bills £7.70 and £15.

I also pay cash in and then transfer it to pay credit cards.

I am struggling to prioritize debts. I started this seriously on 26th May and enjoyed paying off mtg 3 ( which was £117), I am enjoying paying off Halifax which was £500 and is now £170, but only because these were the smaller amounts.

I get a kick out of paying loan/mortgage extra payments as they tell me instantly how much I have saved;)

The overdrafts are annoying - I pay charges to Lloyds and Santander (about £50mth charges for the two :eek: )

JimmyTheWig

fed_up_of_debt wrote: »

Hi JimmyTheWig - the balance is £1500 overdrawn and that's the limit too:o

I pay in each week / month to pay direct debits and include £20 month for overdraft fees.

I have a loan that goes through it £159.88 mth and 2 monthly mobile phone bills £7.70 and £15.

I also pay cash in and then transfer it to pay credit cards.

Sounds like the balance is normally £1500, then. Fair enough.
With the changes to the overdraft charges this will take the equivalent interest rate that you're paying on this to about 25%. While this is one of the highest interest rates I wouldn't worry about clearing this as a priority. The reason for that is that if you manage to pay £1000 off this overdraft you will still be charged £1 a day for it. So you may as well, for now at least, attack some of the other accounts.

I am struggling to prioritize debts.

The general rule is to pay off the highest interest rates first, paying the minimum on the others.
The only exception to that rule is where you can pay stuff off for other reasons, e.g. for the satisfaction it gives you or to make life easier. For example...

I started this seriously on 26th May and enjoyed paying off mtg 3 ( which was £117)

While this would have been a much lower interest rate than your cards, the psychological benefit of clearing it is much greater. Likewise...

I am enjoying paying off Halifax which was £500 and is now £170, but only because these were the smaller amounts.

While not the highest interest rate it would be a great one to clear completely. However...

I get a kick out of paying loan/mortgage extra payments as they tell me instantly how much I have saved;)

To me this is just wrong. You'll save so much more by paying off the credit cards than paying off the mortgage.
If you want to work out how much that would save you then great. If you can't work it out then ask on here.

fed_up_of_debt

Thank you JimmyTheWig that is really constructive and helpful:T

I don't feel so bad now;) Ok take your point about mtg, new strategy is to attack credit cards

mfmaybe

Hi, Fed up of Debt

Working out how much interest you are saving isn't too hard. The % quoted are APRs or Annual Percentage rates. So your mint card is 23.95% Per annum (per year). This means, for every £100 extra you pay off, you save £23.95 per year, or roughly £2 per month. Of course, that also means the minimum payment the next month goes down a little bit, allowing you to overpay a little bit more.

I've done a bit of scary maths for you. On the £5k Mint balance, at that interest rate, the annual interest charge is around £1100 :eek:. I haven't worked it out exactly because I don't know what your minimum payment is. But assuming it's 3%, you would pay off £150 a month, or £1800 a year, but the balance would only go down by around £600 or £700. It's a very sobering thought. Would it be useful for you to aim to overpay by at least the interest amount each month? That should be visible on your statement.