Opinion Wanted

sm82

I currently have 3400 on a 0% credit card, where the 0% deal ends Dec next year. I'm chipping away at this at £150/month, but intend to have it cleared by then with no hassle.

My dilemma is however whether it would be better financially to clear the debt now using some savings, as the amount of interest I'm earning on the savings is ~£144 for the year. Considering how low interest rates are, does it make more sense to clear the card (despite the fact its 0%), then redirect the cash to savings - I should have replaced what I use by then, or just continue as I am?

jonesMUFCforever

As you have already paid the balance transfer fee you will be better off by doing what you are doing now - paying it off monthly.
Just remember to find out the end of offer date (which will not be the same as your due or statement date) or even better pay it off one month before the end of the promotional period.

Tixy

From a purely financial point of view it would be best to pay off only the minimum payment on your card each month.
And to put the remainder of the £150/month in to a savings account.

And then use those savings to pay off in full just before the card starts charging you any interest.

YorkshireBoy

jonesMUFCforever wrote: »

Just remember to find out the end of offer date (which will not be the same as your due or statement date)

Whilst you can almost guarantee* it won't be the payment due date, many card providers' 0% offers do actually end on a statement date. Perhaps MBNA is the most well known of these.

or even better pay it off one month before the end of the promotional period.

If you do this, be sure not to use the card for any purchases until you see a zero balance statement.



* I suppose there's a 1 in 31 chance!

Fruit_and_Nut_Case

Tixy wrote: »

...put the remainder of the £150/month in to a savings account.

...remembering that some of the best savings accounts are actually current accounts.

planteria

all good advice above, don't repay early, but use the best accounts you can to ensure you have the funds available to repay in full by the end of the 0% deal.