Suggestions please

steve700

Hi,

I have £4.5K approx to pay before the end of January on a 0% CC.

At the moment, my current mortgage is on the standard rate (changed last month) and it'll be about £800 to switch to a tracker of about 5.39% where I can make overpayments of up to £500.

I can spare about £1500 a month to put towards this at present so my question is:

What would you do?

Get the CC paid off ASAP and then worry about the mortgage, hoping that interest rates will drop anyway before I change it.

or

Pay to switch the mortgage this month and clear £750 on the CC, overpaying on the mortgage by £500 in future months with the balance going towards the CC

My only concern is that i don't get to January, having been too focused on the mortgage and find that I don't have the available cash to clear the CC before the interest free period ends...........

Your thoughts please..........

Steve

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Kaz2904

If you have 6 paydays between now and your 0% ending then you need £750 per month to clear it. I would put this money into a high interest account for the time being and throw the rest (£750) at the mortgage each month. Come January, pay off the 0% cc and use any interest earned towards your mortgage. Then how about getting a 0% on purchases cc and put any money you spend into the interest paying account until it needs to be repaid. Any interest you earn then goes straight to repay the mortgage. So on and so forth. This way you are making your spent money earn you interest even after you have spent it! You will need to be disciplined to do this otherwise you will pay more than you earn in interest.

David_B_2

If you have £1500 spare each month then you are in great position and there really should be no excuse to why you can't pay the CC off come January. I'd start by making sure you have the remaining balance available come Jan or overpaying now on it so it's gone come Jan (if you don't want to re-move it). At 0% it's not causing any interest as yet where the mortgage on a SVR very much is. Depending on what type of mortgage you have, every day could be costing you and you need to look into moving it ASAP.

You need to work out what you have outstanding and is £800 (or less) going to save go long term. Look around for the best deal. I did mine for free by staying with the same company and it just so happened they offered what I wanted with a bit of give and take.

PS: I don't think the rates will go down just yet.

All the best.