What to do with £1200

abby1234519

I have just paid off all of my interest bearing debts. I am left with the below

BarclayCard £1,944,72 45 min payment
MBNA £2,162.89 25 payment
HSBC £4,993.89 120 payment
First Direct £1,298.41 41 payment
Very £225.00 0 payment

They are all currently 0%

BarclayCard interest free runs out in 2017, I think MBNA runs out in Nov 2017, First Direct Runs out mid 2017 (not sure on date) and HSBC has another 25 months interest free as well.

Very is 10 months interest free

I have £1200 cash. Do I do the obvious thing and pay off Very (but I'm not currently making a monthly payment to this so it won't really snowball it in a sense) and then allocate the rest to the smallest debt? Debt running out of interest free period first? Spread it evenly? Whats the best method

I have £350 a month allocated to pay the above off which allows for a small snowball as well.

MrsSave

Do you have an emergency fund? If not, I'd personally keep it as an emergency fund (not for any spending but a genuine emergency - mine is more difficult than normal accounts to access so I don't dip into it) in case something does happen. It will mean that you won't need to access credit again.

abby1234519

I have a small emergency fund. Enough to cover car repairs etc

Sharon87

I personally would get rid of Very debt - might feel satisfying paying off one debt. Then put the rest into a savings account and pay it to the next credit card whose 0% offer runs out a few days before it actually runs out. Could earn some interest on it in the meantime, if you get a decent savings/current account that pays interest.

enthusiasticsaver

the best thing would be to pay it off credit card with the least number of interest free months left. Yes you could clear very or save it until the first interest free deal expires but if I were in your position I would pay the First direct one as that would almost clear it and it runs out in mid 2017 anyway. That also frees up £41 to snowball to Barclaycard.

buglawton

If I had £1200 spare I'd blink. Then it'd be gone.

A4445

If I was in the same position I'd get rid of the Very and put the rest to First Direct. That means next month you could pay the rest of first direct and that would mean 2 debs cleared.

MrsSave

abby1234519 wrote: »

I have a small emergency fund. Enough to cover car repairs etc

In that case I'd pay off the very in full and then put the rest towards the first direct. For me it would be psychological and I'd want to see the number of debts decreasing so I would then pay off the first direct ASAP.

Helvetica_Van_Buren

- Stick the money in a high-interest current account. I make £8.31 interest per month on a balance of £2,000 in my TSB classic current account.

- Use this as your emergency fund.

- Keep paying minimum payments to your credit cards.

- When the first 0% offer expires, transfer the balance of that card away to a new card with a 0% offer OR an existing card with a NEW 0% offer.

- If this is not possible, pay as much of the balance off as you can with your emergency fund; then pay the now interest-accruing balance (if any) as quickly as you can.

- Use this now empty credit card as your new emergency fund (be strict with yourself) and keep paying the minimums on all the other credit cards.

- Each month you make a payment this will reduce the NEXT month's minimum payment. Each time this happens, place the surplus in your high-interest current account - along with any extra you can spare.

- When the 0% on the next credit card expires, repeat the process.

Summary:
Don't rush to pay anything off that's currently 0%; save the money, earn interest. plan, and pay things off when promotional offers end.

tori.k

It depends on how you feel about having debt 0% or otherwise, if it something that plays on your mind then clear it off the debt, if it doesn't than bank it until you need it.
Personally with savings being so low I would do as MrsSave suggested clear the Very and the bulk of the First Direct, but then I don't sleep easy knowing I owe anyone.

MallyGirl

I'd get rid of the Very account and then put the rest somewhere earning interest until you use it to pay off the next expiring 0%.
There are so many threads about people getting the Very interest free deal wrong as the 0% runs out unexpectedly, or not in line with the statement date, and then you don't just start incurring interest but instead get hit with interest from day 1 at a pretty high APR. I would remove this from my life and never go there again.