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pay off credit card now or keep for a deposit?

edited 30 November -1 at 1:00AM in Debt-free Wannabe Challenges
4 replies 701 views
lilyjosielilyjosie Forumite
2 Posts
edited 30 November -1 at 1:00AM in Debt-free Wannabe Challenges
Hi we have £20 K on our credit cards. (hard to write!) and we have just sold our flat giving us £10 K. We are renting a house and want to buy as soon as we can. My husband is on a fixed salary but I am freelance and hoping to make £10 K more next year (not guaranteed but likely). I didn't want to use our deposit to clear some of the the credit card debt but with such a huge debt we won't get the mortgage we want. Is it wise to pay off half of the debt and then start saving seriously for another deposit or put the 10K into an ISA and pay off the credit cards as I make the money.

Any advice would be much appreciated.

Thank you.

Replies

  • laurag89laurag89 Forumite
    728 Posts
    Seventh Anniversary Combo Breaker
    ✭✭
    Hello, It is a tough one.... but it is fact that you will pay more interest on a credit card than you would in any kind of ISA, If it were me I would probably go for clearing the credit card in the long run it is more cost effective. You should always aim to clear debts first. I do understand though that it is really hard when you are saving towards something, to then have to start from scratch because of paying off debts, but it will be nice to see your savings building back up whilst having smaller debt.

    Hope that helps a little, but if you cant get the deposit you want because of the debt I really think you need to tackle that first :D

    Good luck x
    Total debt to pay: £14,071.41/ Remaining debt: £12,884.12: Amount Paid: £1,187.29

    Survey xmas 2018 savings: £10 / £150
  • BuffythedebtslayerBuffythedebtslayer Forumite
    17.2K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
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    I know I can't get a mortgage with any kind of debt. However it may be different for me as I am single, I think now perhaps having a debt would be a problem re mortgage.


    Perhaps ask the bank? or is that a bad idea to alert them to the wanting a mortgage, I never know!


    XX
    Current debt £1980 - Debt free date 25 December 2021
  • rubywhatashmoorubywhatashmoo Forumite
    586 Posts
    Part of the Furniture 500 Posts Home Insurance Hacker! Debt-free and Proud!
    ✭✭
    Me & OH only had 1.5K on a credit card last year and it drastically reduced the amount of money that people were willing to lend us (we were very strongly advised to clear it which we did)
  • Thank you all for taking the time to reply. It is clear now that I need to pay off the debt first and start from scratch. Determined to get on top of it all and save the cash.

    Thank you:rotfl:
This discussion has been closed.
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