How would you tackle this?

kiss_me_now9

Just wanted some input on this situation. I have an idea of what I want to do, but wondered if anyone else had any better ideas as to how to tackle this money situation I'm in...

I have a CC, that I got a couple of years ago. The interest free period has now run out and is now 1.45% on purchases (I don't use it to get cash out). By and large I use this for petrol, large grocery shops, and the odd 'larger' purchase such as a Mothers day/birthday present that was jointly purchased with my sister and Dad. I have £780 on that CC and am currently making the minimum payments on it.

I'm at university studying a healthcare course and so receive a bursary every month. It just about covers my living expenses, but not my rent, which I'm paying for out of savings from when I worked full time. I have just about enough to cover most of next years rent if I'm frugal over the summer.

I tried to find a job over summer but was unable to do so because of the short holidays I get due to the structure of my course. I would like to find a job when I return to uni in September but it's unlikely I will be able to find anything suitable as I am fully committed to uni 5 days a week during placement (3 days in placement and 1 day at uni 9 - 6 and 1 day working on assignments).

Basically is it worth paying off as much of my CC as I can afford from my savings and then hoping that I can live on next to no money when I'm back at uni or should I just keep paying off the minimum payment and accept that it's going to grow slightly?

I feel like it's a really obvious answer but I think I need a slight shove to actually take that chunk out of my savings account!

nkkingston

Are your savings earning more in interest than your credit card is costing you in interest? If the credit card interest is higher, pay it off. If the savings interest is higher, don't pay it off.

1.45% is low. Low enough, actually, that it makes me think you've got good enough credit to get another 0% card to switch the balance to, and save yourself even that.

MallyGirl

It is probably 1.45% per month.
Bar jobs are evenings and weekends

kiss_me_now9

nkkingston wrote: »

Are your savings earning more in interest than your credit card is costing you in interest? If the credit card interest is higher, pay it off. If the savings interest is higher, don't pay it off.

1.45% is low. Low enough, actually, that it makes me think you've got good enough credit to get another 0% card to switch the balance to, and save yourself even that.

I'm not sure if my savings actually earn anything, tbh. The interest on my CC is definitely monthly, so it's working out about £20 a month (I think, not great at maths).

Thinking it over today I've forgotten one key thing - At the moment I don't have a specific student bank account, so my O/D is charged; I'm changing over to a student one in the next few weeks so I will get an interest free O/D. That means it makes far more sense to pay my CC off, and if needed go into my interest free O/D, doesn't it?

MallyGirl wrote: »

It is probably 1.45% per month.
Bar jobs are evenings and weekends

They are indeed and so I could feasibly get a Friday/Saturday night job however it would mean I'd get absolutely no social life as I can't go out during the week, and would have to give up the social activities I do (gym and dance classes). Realistically as I'd only be able to do Friday and Saturday evening I'd only be bringing in about £80 a week on those limited hours. If I do go down the avenue of getting a job when I go back I'll look into bank care work which a few of the others on my course do.

awindup

I would say always always always pay off any credit that you have which has an interest charge attached. Pay the highest costing ones off first ( they may not be the ones with the highest balance just the highest actual monthly charge because you still owe the same gross amount of money over all of your borrowings... if that makes sense ). You can always use the credit cards later to get things you cannot forward if you can't get another job and you will still have the same available credit to use in total so it is a win win. Also once you have paid off your credit card there is a possibility you could then use that good credit star you've just don't to get a different credit card that has an interest free period once again make your borrowing cheaper overall! Finally your circumstances are more likely to change over 6 months then they are in 6 weeks therefore getting rid of (costly) debt as quickly as possible means that if your circumstances improve you can then pay off the less costly debt also. You're doing exactly the right thing by going for products that suits your situation so keep up the good work and I hope everyone's advice has been useful to you.

Newdirections

Have you looked at your eligibility for a new 0% card?