£20k in debt - help me get it sorted!

PinkPoppies

Rabka wrote: »

Snowball calculator suggesting that I should pay off Capital One first...

34.9% is a whopping great big interest rate you'd be going up to in 5 months (unless you could get another 0% deal elsewhere before then) so to me it does make sense to focus on clearing it while it is at 0%, even if you are paying 9.9% elsewhere in the meantime.

northerner999

If you can pay up to £600 a month then you may be able to wipe that Capital One balance before it goes to 34.9% (£600 x 5 being £3,000). I'm assuming this money is on top of minimum payments.

If you feel comfortable doing this, after minimum payments for everything, i'd be tempted to stick everything spare you'd put towards extra payments into an easy access savings account. Then diary a suitable date in May to transfer everything from that account towards paying off your Capital One balance. If you feel you're at risk of spending this money, then just pay it off to reduce the outstanding balance.


It sounds daft, but the Barclaycard Initial should probably be your lowest priority, as from June the Platinum rate will soar and will then be your most expensive one.

Rabka

Well, here's my thinking going forward.

My Barclaycards always offer me a 0% balance transfer deal every month - sometimes for 6 months, sometimes longer. My thinking is that if I clear as much of each Barclaycard as possible, I open up a greater balance transfer opportunity.

So my thinking is to clear the £1710 Barclaycard Platinum (min on others) within the 5 month 0% window, then transfer over whatever balance is on the Capital One card at 0%, then chip away at that, keeping minimum on the rest.

What say you?

Rabka

CRAPOLA! I have just read how payments are allocated at Barclaycard:

If you do not pay the total outstanding balance in full by the payment due date, we'll apply the amount you do pay to reduce higher interest rates balances before lower interest rate balances. This usually means that you will pay off any cash transactions and purchases before you pay off any of your balance transfer.

So that means pay off Capital One, then transfer the £1710 to a 0% card elsewhere, pay that off, then pay off Barclaycards as much as poss.

Yes?

patman99

If you check the T&Cs of all your CC providers, you will see the same payment structure in place.
I believe they have to do it this way now, as the FCA (or FOS as it used to be) got quite irrate about the way credit card providers used to allocate payments to new spending firat, then outstanding debts.
This meant that if you continually spent on your card, but only ever paid minimum payments, you would incurr greater and greater amounts of interest.

The new way of doing things, means that if you have £1600 of existing credit card debt on a card & spent another £100, the next payment would go to the £1600 first as it it is accruing interest.

Rabka

Oh. I understand all that but I'm still not much clearer as to which one I should target paying first!