Redundancy payout & Debt payoff

Hello everyone,

I wanted to bounce something off you and see what you think.

Today I got a 50K redundancy payout and start a new job in 2 weeks which is well paid.

My debt at the moment is:
Barclaycard: £4200 @ £95 per month 0%
Virgin: £10100 @ £253 per month 0%
Lloyds Overdraft: £3326 @ £40 per month
Lloyds Credit Card: £1100 @ £20 per month

The Barclaycard and Virgin credit cards are interest free.

Do I (1) pay everything off now and cut up all cards and never use credit cards again (2) do nothing and just pay down everything off over time (3) pay off lloyds stuff now as accumulates interest and move the virgin/barclaycard debt around on 0% cards until paid off?

I'm thinking of biting the bullet and going for option (1) but would love to know your opinion.

Thanks
Steve

Comments

  • StokieBecks
    StokieBecks Posts: 4,997
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    Personally if I was in that position I would clear the lot.

    Would still leave you a big sum to put away somewhere (don't fritter it away) and also free up £400 a month for you out of your new income.

    When everything is paid off close the cards and get rid of the overdraft facility
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  • enjoyyourshoes
    enjoyyourshoes Posts: 1,093
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    I guess you need to consider living within your own financial envelope.
    Debt is a symptom, solve the problem.
  • Gladioli
    Gladioli Posts: 47
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    I would go for number 1, in fact I cant think of a good reason to do either of the others, so unless you can for me it would be a no brainer!
  • chelseablue
    chelseablue Posts: 3,288
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    I'd also go with option 1
  • fusionx212
    fusionx212 Posts: 327 Forumite
    i'd say it maybe worth holding onto one credit card.. for an active credit history etc.

    you can never say never even with that money behind you.
  • Personally I'd go with option one.
    Good luck whatever your decision.
    It will all be ok in the end - if it's not ok, then it's not the end!
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    Mortgage paid off.
  • nextyeartina
    nextyeartina Posts: 756
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    Option without a doubt for me :)
    The £1,000 emergency fund challenge #163 - £536.16/£1000
  • Jolinar
    Jolinar Posts: 179
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    Personally, I'd pay off anything charging you interest then wack the rest in high interest accounts and pay off the 0% stuff by the time the offer period is up. Least that way you earn the interest whilst it costs you nothing.
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