General Advise Please

zeoknight

Hello All,

Apologies if this is in the wrong section!

Just a little advise needed from the MSE community regarding our situation.

Currently have 2 CC between us both with around £3k on them. CC1 is near the end of the interest-free period after which it goes to 18.9% APR (Sept). CC2 still has another 12 or so months before interest kicks in.

Now this is the situation, our original plan was to repay the CCs before the interest period expired - as you can see from CC1 this has not been the case, some due to poor judgement others due to unexpected circumstances (like when your MOT comes to near £600!).

Anyway, between us we have around £1k a month spare give or take, so we could still easily repay the CCs quite quickly albeit with a little bit more going to interest on CC1. However, there are 2 large commitments coming along sooner and my concern is that we will be spread thin trying to pay CCs back and:-

save £7k-ish for first time property purchase - January 2016
save £3k-£4k for our wedding in Mexico - April 2016

We can't change these deadlines too much as family and friends have been notified of the approximate date of wedding.

So, what does the MSE community think we could/should do?

A) pay of CC's as originally planned
speak to bank - discuss a loan (estimated £140-£150 per month for this, which would then allow us to concentrate wholly on the 2 above).
C) something else?

Thanks in advance,

glentoran99

zeoknight wrote: »

Hello All,

Apologies if this is in the wrong section!

Just a little advise needed from the MSE community regarding our situation.

Currently have 2 CC between us both with around £3k on them. CC1 is near the end of the interest-free period after which it goes to 18.9% APR (Sept). CC2 still has another 12 or so months before interest kicks in.

Now this is the situation, our original plan was to repay the CCs before the interest period expired - as you can see from CC1 this has not been the case, some due to poor judgement others due to unexpected circumstances (like when your MOT comes to near £600!).

Anyway, between us we have around £1k a month spare give or take, so we could still easily repay the CCs quite quickly albeit with a little bit more going to interest on CC1. However, there are 2 large commitments coming along sooner and my concern is that we will be spread thin trying to pay CCs back and:-

save £7k-ish for first time property purchase - January 2016
save £3k-£4k for our wedding in Mexico - April 2016

We can't change these deadlines too much as family and friends have been notified of the approximate date of wedding.

So, what does the MSE community think we could/should do?

A) pay of CC's as originally planned
speak to bank - discuss a loan (estimated £140-£150 per month for this, which would then allow us to concentrate wholly on the 2 above).
C) something else?

Thanks in advance,

If you have 1000 a month spare you could pay off the cards in 6 months and still have plenty of time to save for the rest

Tixy

You ideally want to pay off all your cc debt before you purchase your property (assuming you will have a mortgage)

So I would pay off the first £3k as soon as you can (once the 0% period finished), and keep the card open.

Then start saving the £1k a month towards the property deposit and the second cc and pay off the second cc at the point that 0% deal ends.

If you have 16months and can save £1k a month then that is sufficient to pay off both cards and save up £10k for a house deposit.

Then after you have purchased a property you can use any savings left over and if required a credit card to pay for wedding costs.

zeoknight

@glentoran99 @Tixy - thanks for the response.

My concern is that other costs may/could come into our £1k per month allowance - i.e. things coming up such as christmas and other unexpected costs etc - this is the main reason we we're unable to pay off CC1 before the interest period expired.

Even if I take the long view and assume that every month £250 may be needed elsewhere - that then only allows us £750 * 16 months = £12,000 - £6000 to CC's, only leaving £6k for house and wedding - not nearly enough.

My idea (although possibly foolhardy) was to get a bank loan to cover the credit cards estimated @ £150 per month over 5 years, then allowing us to concentrate the rest of our income on deposit and wedding costs.

Couple of things to note, the minimum payment required on both CCs totals up to£150 - so in terms of monthly outgoings - nothing would change, we would still have £1k per month after costs.

Also, the property we are getting mortgaged will provide us the same or near the same monthly mortgage cost of our current monthly rent - so we won't have any alterations in terms of monthly costs after the property purchase.

Obviously, this is at the expense of paying more ££ to the bank in interest if going the loan route.

Other ideas?

pmartin86

zeoknight wrote: »

My concern is that other costs may/could come into our £1k per month allowance - i.e. things coming up such as christmas and other unexpected costs etc - this is the main reason we we're unable to pay off CC1 before the interest period expired.

I don't want to sound harsh, but if you lump "Christmas" in with "unexpected costs" then you really need to sit down and have a look at your budget, because its clearly not working out.

You need to take your "unexpected costs" and plan for them, you will have car maintenance, birthdays, chrismas etc EVERY year beleive it or not and you need to allocated a sensible amount every month to these to "even out" things. Once you've done this, then you will know how much you have a month left over, and its not going to be the 1k you think you have.