Paying off credit card

SL123

Hi I wander if anyone can give me a bit of advice. I have 2 credit cards, one HSBC Visa which has a balance of £2378 and limit is £2750. APR is 27.9% and minimum payment is £117. Other card is a Barclaycard Platinum balance £4000 and limit is £4200. APR is 29.9% minimum payment is £92. I have £3000 been given to me from a family member 😁 my question is which card do I pay the £3000 off? Im thinking to pay off the HSBC card or shall I split the £3000 in half and pay £1500 off each card? Thanks

bsms1147

Pay the one with the higher APR

PeacefulWaters

bsms1147 wrote: »

Pay the one with the higher APR

Pay minimum payment plus £1 on all cards.

Then, as the above poster says, pay off the one charging the highest interest rate first.

YorkshireBoy

An alternative...

There may be a case for paying, say, £2.5K off Barclaycard and £500 off HSBC. Whilst it wouldn't improve your overall credit utilisation, it would make your HSBC account appear a more 'manageable' debt.

But only consider doing this if you feel there's a good chance you'd be accepted for a 0% BT card to shift some of the remaining debt once these payments find there way onto your credit files.

Of course if your credit files are trashed (late payments etc), or you're not working/on low income, then do as the previous posters have suggested.

rehanmalik3030

SL123 wrote: »

Hi I wander if anyone can give me a bit of advice. I have 2 credit cards, one HSBC Visa which has a balance of £2378 and limit is £2750. APR is 27.9% and minimum payment is £117. Other card is a Barclaycard Platinum balance £4000 and limit is £4200. APR is 29.9% minimum payment is £92. I have £3000 been given to me from a family member �� my question is which card do I pay the £3000 off? Im thinking to pay off the HSBC card or shall I split the £3000 in half and pay £1500 off each card? Thanks

If you are not working and have a good credit history then I would use the money to pay the minimum plus £1 for each card per month. £3000 will give you 14 months of minimum payments hopefully you can find a job in this time. Alternatively you could pay off the entire HSBC card leaving yourself with £622 that would give you 6 months worth of minimum payments for the Barclaycard hopefully you will find a job within 6 months.

If your not working and have a bad credit history then i would miss payments on both cards and contact both credit card companies telling them your out of work and would like to go on a payment plan, hopefully this will be a lot less than the minimum you are currently paying plus they may stop the addition of any further interest.

If you are working then it looks like you have been living off your credit cards in which case I would pay off the HSBC card in full and put the card away for emergencies only and keep the remaining £622 as an emergency cash fund. And work you way through the Barclaycard debt. This way you would have paid off 1 card (psychologically positive) and have an emergency cash fund (in case you are made unemployed) to continue paying the minimum on the Barclaycard debt

Paully232000

If you were just looking at saving money in the long run makes sense to pay the one off with all money, with the highest interest rate (barclaycard).

However, if you paid off in full the HSBC, and then put £700ish onto the barclaycard your monthly payments would be at their lowest they can be with a £3000 payment (as at the minute you are paying a lower min payment on more of a balance on the barclaycard). This will cost you more in the long run (if you cant switch the remainder to a 0% BT card), but will give you more money to spend on other things per month if you are struggling for example.

I may have that completely wrong, but i am sure someone will correct me if so.