Paying off CC vs. Paying Off Capquest!

125max

Firstly sorry if this is in the wrong place, I'm just looking a little advice. I have a cheque coming my way which I'm going to use to pay off some debts, however I'm unsure as to which debt to pay off.

I've always been told pay off the one you're paying most interest on first which is the credit card. However, I owe approx £700 to capquest (zero interest) which I've been paying at £20 a month and I'm sorely tempted just to clear this off. I recently applied for credit and was refused due to this outstanding debt with them which is why I'm considering clearing it.

Basically would I be best clearing the Capquest rather than paying £20 for the next 3years or clearing the amount off my credit card as currently the monthly interest alone on it is around £75.

Thanks for any advice!

xHannahx

Financially your best off paying the higher interest accounts first. Unless it's solely one debt causing declines which is unlikely unless you are reapplying with the same company.

benten69

No brainier to me, pay off the credit card. The loan is 0%, why pay the CC company £75 a month for doing nothing? That is £75 a month you can put towards your other loan and pay if off in 7 months (£20 + £75 saving on your CC interest + I assume you can find £5 somewhere else = £100 a month).

sourcrates

Try a full and final offer to crapquest for say 40% of the outstanding balance, if they accept, pay that off, throw what's left at the credit card.

125max

Capquest said they'd settle for around £200 less, again I'm rather green in these situations but was told that it showing as settled rather than paid in full on my credit history could also give an bit of an impact?

I personally thought the credit card was better off cleared also but hearing so many stories im somewhat confused.

I've also been told that debts like the Capquest debt would need to be cleared around 2 years before a mortgage company would consider me which was another reason I was going to try and clear it.