Dilemma!

getmore4less

Pay off the interest charging debt then have plan for the rest, delay doing/buying for the house as you are just borrowing if you don't clear the debt.

CalumHeath

The chances of winning even one of the small Premium Bonds prizes is minimal.

I would do this:

- Get all your money out of Premium Bonds
- Pay off the half of the card accruing the interest
- Put the balance into an ISA
- Get satisfaction from watching your money MAKE interest
- Now that the account is at 0%, pay only the minimum payment off the credit card, presumably this'll be less than the current minimum payment you are paying.
- Take the difference between the old minimum payment and the new minimum payment (however small it is) and put this into your ISA / emergency fund every month.
- you still have the credit card for emergencies until you have replenished your savings.

jodles16

I would say pay of the half at the high interest rate, think Calumheath's plan sounds pretty ironclad!

Good luck and well done on the new house!

Jodles

asparagus1968

CalumHeath wrote: »

The chances of winning even one of the small Premium Bonds prizes is minimal.

I would do this:

- Get all your money out of Premium Bonds
- Pay off the half of the card accruing the interest
- Put the balance into an ISA
- Get satisfaction from watching your money MAKE interest
- Now that the account is at 0%, pay only the minimum payment off the credit card, presumably this'll be less than the current minimum payment you are paying.
- Take the difference between the old minimum payment and the new minimum payment (however small it is) and put this into your ISA / emergency fund every month.
- you still have the credit card for emergencies until you have replenished your savings.

I'd follow this excellent advice

ShootForTheMoon

As above, but rather than putting your savings in an ISA, consider some of the high-interest current accounts...
There are lots available - eg. TSB pays 5% on balances up to £2k (and you can have 2 accounts) Lloyd's pays 4% on £4k... There's a lot of choice that would leave you better off (even after tax)
Check the savings boards for some brilliant advice on this!!
Good luck!

Shoot x

eskbanker

I'd echo the idea of putting the money to work across debt repayment and productive saving, but instead of an ISA I'd suggest one of the current accounts that pay much better interest, see http://www.moneysavingexpert.com/savings/savings-loophole for more details. You can earn 5% gross (4% net of basic rate tax) on £2K with either Nationwide or TSB, whereas easy-access cash ISAs are typically paying about 1.5% just now.

Edit: beaten to the same advice by ShootForTheMoon while I was typing, great minds think alike!

Brightspark87

I agree with everyone - you should pay half it would be great to get rid of that 6.9% interest! GOOD LUCK and well done xx

PlymouthMaid

I have just cashed in Premium bonds to clear my credit card as the amount I am paying in interest is the same as what I win each month and of course if I don't win then I am going backwards. Thinking about the suggestion to move PBs into savings accounts, am I missing something as I make 5% of £2000 a measly £1 a year in interest so doesnt seem worth it. Where have I gone wrong?

[Deleted User]

You've gone wrong in the maths.

5% of £2,000 is £100.

eskbanker

PlymouthMaid wrote: »

am I missing something as I make 5% of £2000 a measly £1 a year in interest so doesnt seem worth it. Where have I gone wrong?

Decimal point in the wrong place! 5% of £2K is £100....

Edit: must stop posting in this thread - every time I do, someone beats me to the same answer!