paying off 0% debt to reduce monthly outgoings or save?

melissa'smoney

Hi all,
I've got a lump sum of money that i'm not sure what to do with. We have CC debt but it's all on long term 0% that we shift. Also have household items on 0%.
We need to reduce our monthly outgoings as i'm taking a lower paid job to fit in our little one.
I hate the thought of paying off debt that's 0% as that money could be used elsewhere or saved....
What would you advise?
Tia x

Mirno

Put the money in the highest savings account you can.
Use this savings account to pay off the minimum payments as and when they come in. A day before the 0% ends pay off the rest from the savings account - the extra (from interest accrued over time) is yours as a bonus.

Archi_Bald

https://forums.moneysavingexpert.com/discussion/5374614

melissa'smoney

Thanks. I forgot to add, I have a first direct offset mortgage so wondering if the best option is to put it in my linked saver (not sure of interest rate)?
We have £7500

Archi_Bald

NO! The FD linked saver pays pittance. Did you actually look at the link I posted? You should be getting at least 5% AER for this amount of money.

YorkshireBoy

Archi_Bald wrote: »

NO! The FD linked saver pays pittance. Did you actually look at the link I posted? You should be getting at least 5% AER for this amount of money.

The account will 'pay' the mortgage rate interest won't it Archi? Unlikely to be 5% though, but might be somewhere close when/if you factor in savings tax?

atush

I would save it til the 0% interest is finished (and not roll it over at cost) and pay it off then.

this is IF you can leep yourslef from spending it?

Archi_Bald

YorkshireBoy wrote: »

The account will 'pay' the mortgage rate interest won't it Archi? Unlikely to be 5% though, but might be somewhere close when/if you factor in savings tax?

May be I misunderstand how the linked saver works - I suppose you are right.