Pay off debt with savings?

toontastic

After having one of my credit cards half the amount of credit available to me and request immediate payment of this amount I would be looking to get rid of this debt as soon as possible. Yes you might have the chance to earn £20 a year in interest payments but thats forgetting risk. One messed up payment and not only is that interest saving lost but so is your 0%.
Personally I would do as someone else said, keep £1000 back as an emergency fund while you pay off your debt, stick the other £2000 on the credit card then make sure your on a written budget to get the rest of the debt paid off as quickly as possible. Then once it's paid off throw the debt payment at next debt or at creating savings if you have no further debt.

sam_in_leeds

bambos wrote: »

Hmm catch 22 really!

I will give you an example to highlight my point.....

You use your savings to pay off the CC and suddenly you need 3k for a blown up boiler/ car repairs etc, you would have no savings to fall back on & would therefore be in debt again.

I would personally look at the duration of the 0% divide the 3k over this period and pay the amount each month. You will pay it off, keep your savings and pay nothing extra.

What the poster above said.

Am in exactly the same situation atm (Altho £395 CC 0% and £1800 savings). Few months back my car needed new brake-pads. if a few months back I'd thrown everything at being debt-free I'd have had to borrow to pay back for the brake-pads but because I'd started saving I had the spare cash to keep the wheels of steel on the road for a few more months and not accrue any non-interest free debt.

A while back when I was aiming for debt-freedom (was a 0% card btw) and not saving anything my roof blew off my rented house. I couldn't move because I didn't have the deposit to move/first months rent/admin fee etc. That sure was a wake-up call!

Maybe pay a bit off but I certainly wouldn't want to clear all the debt if it's 0%. I like to think I've worked so hard to build up the savings it'd break my heart more to actually have to log-on to my banking and manually sort out a payment to pay off the debt with it than to just have the direct debit take the regular amount out!

:rotfl: