Pay cards off in full or incrementally (situational not theoretical)

BigBoss

I have 5 credit cards 4 of which I use and 1 that I never use. All of the cards are out of their interest free periods and they all have quite high interest as they are rebuilding credit file type cards (Vanquis, Tesco, Aqua, Capital One and Luma)

My combined debt with these cards is £2286.81

In terms of savings, I have a total of £6520.

Should I pay the cards off in full immediately, or still in increments?

HappyMJ

Pay them all off in full immediately. Rebuilding credit cards should always be paid off in full each month and they should never be allowed to roll over and interest charged.

Paying them off in full shows responsibility using credit as you can show you can budget month to month and are not tempted to use the money available to you.

BigBoss

HappyMJ wrote: »

Pay them all off in full immediately. Rebuilding credit cards should always be paid off in full each month and they should never be allowed to roll over and interest charged.

Thanks. Could you just as to elaborate why this is?

Valli

BigBoss wrote: »

Thanks. Could you just as to elaborate why this is?

poster already did -

HappyMJ wrote: »

Paying them off in full shows responsibility using credit as you can show you can budget month to month and are not tempted to use the money available to you.

Thrugelmir

BigBoss wrote: »

Thanks. Could you just as to elaborate why this is?

Interest. You either pay it or earn it.

BigBoss

Haha, poster actually edited that in AFTER I'd written my response.

Thanks all.

chattychappy

HappyMJ wrote: »

Rebuilding credit cards should always be paid off in full each month and they should never be allowed to roll over and interest charged.

Paying them off in full shows responsibility using credit as you can show you can budget month to month and are not tempted to use the money available to you.

I agree the OP should pay them off (to save interest), but I disagree with the rest of the above. Whether or not you pay your balance off in full is neither here nor there. What looks good on a CRA report is not missing payments, paying more than minimums, staying well within your limits, not having too many searches. If the OP pays off the balance and continues to put significant spend through each month, then that will demonstrate he/she can handle credit. But that might be less so than if higher, balances were maintained (albeit well short of the limits) through not paying off in full each month.

As I say, I'd pay off the balance. I'd never let the interest tail wag the "improve my rating dog".

Thrugelmir

chattychappy wrote: »

then that will demonstrate he/she can handle credit.

Until the month arrives and the balance cannot be cleared. As the borrower has no savings. Living on the edge has more down side risks than the possibility of upside ones.

£319 million of credit card debt was written off in the first quarter of 2014.

Valli

BigBoss wrote: »

Haha, poster actually edited that in AFTER I'd written my response.

Thanks all.

Haha?

Happy posted (post 2) BEFORE you asked that question (IN POST 3) and no edit is shown on Happy's post!

Valli

Thrugelmir wrote: »

Until the month arrives and the balance cannot be cleared. As the borrower has no savings. Living on the edge has more down side risks than the possibility of upside ones.

£319 million of credit card debt was written off in the first quarter of 2014.

OP in this thread owes about £2K but has savings of about £6K; it could be reasonably concluded that the debt is costing OP more than he/she receives in interest on the £6k.

ic

Valli wrote: »

Haha?

Happy posted (post 2) BEFORE you asked that question (IN POST 3) and no edit is shown on Happy's post!

The times are close - I think this forum doesn't show an edit marker when you edit within a minute or two of the post. I always thought it was when you edited before anybody else had viewed the post - clearly not.