Savings or Credit card?

Littlem84_2

Advice would be helpful:


I have roughly £5680 to owe on my Barclays credit card, which is 5% interest, and have £2000 in savings. I am unsure whether to pay my credit card off with my savings or keep it for emergencies. I try to save £300 a month and pay £130 a month for my Barclaycard.


I am not a big earner and live at home with parents.


I have a CCJ from PC World in which I had no knowledge of as I had moved address and PC World had not sent off my direct debit paperwork off to their head office, so no money was coming out for my £200 camera purchase in 2013. The CCJ falls off in 2019. Other than that, I have no default payments.


Because of this CCJ, I have no hope of getting 0% credit (I haven't dared try to apply!) and no hope of getting a mortgage (I am 32 years old). I feel very stuck with no plan for the future.

[Deleted User]

5% is a very odd rate for a credit card. Are you on a payment arrangement? Or is it a life of balance promo?

Candyapple

There are mortgage companies out there who do accept people with defaults and CCJs, granted they are a small minority and you will need to seek a mortgage broker to search for you - but they are out there. You will also need a higher than normal amount for a deposit and won't be receiving the best interest rates, but you still have a chance for a mortgage.

Regarding your situation - you are 32, live at home with your parents and are in debt with a low paying job. Find a better paid job and start paying those debts off ASAP.

Use the £2k savings to clear your Barclaycard debt and throw everything (£300 savings per month) at clearing this debt. Once the debt is gone, then start your savings again.

Littlem84_2

It's a special deal that I have with Barclaycard. I have been with Barclays all of my life and with Barclaycard for a long time too. I didn't dare apply for a 0% money transfer so asked Barclaycard if they could offer me a better rate than the 12% I was previously on.

mcpitman

Candyapple wrote: »

Use the £2k savings to clear your Barclaycard debt and throw everything (£300 savings per month) at clearing this debt. Once the debt is gone, then start your savings again.

As above, and you will be debt clear in about 12 months.

The other concern is, why have you run up ~6k debt whilst living at home without a mortgage? You either need to reduce your outgoings or increase your incoming funds. Then learn to live within your means.

Unless you fully know what you are doing, or are stoozing, any form of debt (possibly withthe exception of a mortgage) is a sign of living beyond your means.