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Dilemma!

Yvette394
Posts: 461 Forumite



We have pulled the last of our credit card debit onto one card which now totals £3500. My dilemma is that we have £4000 in savings and wrestling with the idea of paying this off but scared about only having £500 left in savings. What do you think?
Apr - Makitia DAB Radio
Wins 2013 £3996, 2014 £1125, 2015 £2906, 2016 £3058 2017 £1025 2018 £6738 2019 £326
Wins 2013 £3996, 2014 £1125, 2015 £2906, 2016 £3058 2017 £1025 2018 £6738 2019 £326
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Comments
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Do your savings earn you more in interest than your debts cost you?
If your debts are at 0%, go all out to pay them down before attacking your savings. If not, consider paying it off and then working hard to rebuild your savings - pay yourself instead of them.
Good luckSome days, it's just not worth chewing through the leather straps....
LB moment - March 2006. DFD - 1 June 2012!!! DEBT FREE!
May grocery challenge £45.61/£1200 -
Half the card is on 6.9% and the rest of 0%. I have £4000 in premium bonds.Apr - Makitia DAB Radio
Wins 2013 £3996, 2014 £1125, 2015 £2906, 2016 £3058 2017 £1025 2018 £6738 2019 £3260 -
Why not pay the half off that is on 6.9% with some of your savings (this should auto clear first as any payments should clear the amount at the higher rate)? Then you can work hard at paying off the other amount?
Regards0 -
Can i ask what you are saving for, or is it an emergency fund?
If it 's just sat there with no job to do, I would use it to pay off debt - without a repayment to make each month you'd be surprised how quickly you can build it up again.
If it's an emergency fund, then perhaps use half (depending on how much you're comfortable with).
If you're saving for something in particular then that's great to have a goal, but you could perhaps look at your priorities.
Good luck.Debt 2008 - Approx £20k | April 2014 £6526 | 30 October 2015 DEBT FREE
PPI claim success - £4338 & £764
YNAB Convert
Saving Goals - YNAB Buffer: £100/£850 | Emergency Fund: £0/£1000 | Maldives: £0/£10,0000 -
I would personally pay half off the debt.
This leaves some money in the bank for a 'rainy day' - and you can rest a little easier knowing some of the balance is paid off.
It also means you keep focused to pay the remaining balance off..0 -
It's a tricky one. We saved it so that if we needed anything we had some savings rather than get back into debt. The problem being we moved into a new house in June. Therefore our mortgage has gone up and any spare money is going into doing the house up. Not sure how long it would take to save up that money again or whether it will even happen!Apr - Makitia DAB Radio
Wins 2013 £3996, 2014 £1125, 2015 £2906, 2016 £3058 2017 £1025 2018 £6738 2019 £3260 -
So the savings was to prevent you getting into debt, you are now in debt so it seems strtaightworward to use the savings to get back out of debt.
I'd actuially pay off the dbt that is incurring interest now and the rest when the 0% dal runs out.loose does not rhyme with choose but lose does and is the word you meant to write.0 -
Half and half vote from me.DF0
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Personally if I was you I'd pay as much as I could off the card. The fact you have savings means you have an income I assume so you could very quickly build those savings back up if you had no CC payments due each month.
Or maybe pay off 3k and leave yourself 1k in savings for peace of mind?0 -
I'd personally pay of the part that isn't interest free with your savings if the interest rate for the debt is more than you are getting in savings.
Should an emergency happen and you don't have enough saving left to cover it you can still use your line of credit temporarily and you would be in no worse position than if you had used your savings for the emergency.Total Debt:
Dec 2015: £20,090.87
Dec 2016: £16,320.850
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