What should I pay next

Dollymix12

I've just made a huge dent in my outstanding cc, I was focussed on getting this paid off first but now I'm not sure if I should pay off the full amount on my cc first or pay off my next account or overdraft first, interest being paid is below, I can pay £900 at the end of the month

Cc £826.71 18%
Next £582.15 22%
Overdraft 1 £500 0%
Overdraft 2 £500 not sure

If I pay my overdraft first I may end up dipping into it again before paying everything off, I'm going to reduce them once it's paid

joedenise

It depends on rate rate you're paying on your 2nd overdraft. If it's more than 18% pay that first, otherwise pay off the CC as it is the highest interest.

Always pay off the highest interest debt first. It also means you'll have one less debt as it will clear the CC, although there may be a little interest to pay next month.

Denise

redux

It depends a bit on the overdraft rate. Or some banks have a flat fee per day, which works out equivalent to a high interest rate if you only use part of it.

But if it's just about the two cards it might be slightly counter-intuitive. Some might say pay the larger amount off in full even though it's lower rate, as this saves all the interest.

But there will be only about a couple of quid interest difference in interest between the two accounts.

I would pay the Next in full and part of the other credit card, maybe £200. These seems more flexible to me, and actually probably also saves about a quid of interest overall.

joedenise

Ignore my first post - Redux is right. I misread the interest rate for the Next account - I thought it said 15% but that was the pence owed.

It should be pay off the Next account and then the rest off the CC or overdraft 2 whichever has the highest interest rate.

Denise

Karen777

Agree - Next first then CC

redux

But if the overdraft is one of those with 50p or £1 a day flat fee, hit that first.

anna_1977

sorry just to check your Next APR. Mine is 24.99% (thankfully all paid off recently) and looking on their website that is the standard rate - I'm sure yours is correct for you but might be worth checking

Dollymix12

Just checked and the 2nd overdraft is also 0% so they will b last, think I will take everyone's advice and pay the Next card off and what ever I've got extra on the cc think it makes more sense that way. Probs not going to save a lot in interest cause I should have everything paid off by Jan/Feb but every penny helps lol

Dollymix12

anna_m wrote: »

sorry just to check your Next APR. Mine is 24.99% (thankfully all paid off recently) and looking on their website that is the standard rate - I'm sure yours is correct for you but might be worth checking

I got an email on 30th Sep to say they were reducing it to 22.9% should have included that .9% they fool you into saying 22% haha

anna_1977

Haha that's good, definitely pay that off first then