Reducing the Monthly Interest on a Credit Card

supasaverbob

Not sure if my idea is any good but maybe someone can give me advice on it. I have several credit cards at the moment, most of them on 0% and I'm paying a bit more than the minimum payment on each of them. However, on one of them I am now getting charged about £25 interest a month and there's about £1800 left on it. What I wondered was, would it make much different to the interest charges, if I do the following:


every month I usually spend around £500 on my debit card, if I paid that amount straight onto my credit card as soon as I get paid and then use the credit card to buy things up to the value of £500. I would also additionally pay my regular payment to the credit card as well (i.e. not use the £500 payment to escape making a payment).


Does this make any sense? Guess it might not save much money as halfway through the month I'd probably be spent up to £250 anyway.


Does anyone have any experience of an 'offsetting' strategy like this? I guess it might save some money but not sure how much. Most of my bills are direct debit so not as if I can pay my whole salary onto it. Maybe it's worth checking if I can pay some bills by CC.

supasaverbob

I should also add that I'm not able to get another balance transfer CC as I have several already and too many searches on my report I think.

[Deleted User]

It would reduce the average daily balance, so yes, you'd save some interest.

If any of your cards are significantly higher/lower interest than the others, it may be worth looking at BT'ing between them, although you need to account for fees.

sourcrates

You may save a few quid by that method, but nothing massive.

Best bet maybe throwing every spare pound you have at that particular debt to bring down the balance as much as you can.

Can you comfortably afford your borrowing otherwise ?

If not, you may want to post up a statement of affairs and allow people to see where any savings can be made in your budget.

supasaverbob

Thanks for advice so far. Am managing to pay debts comfortably but I could cancel some non-essential montly payments and pay more.

Further question on this strategy - if I paid for my shopping on the card then straight away paid that amount off from my bank account, would this reduce my interest because of the way payments are allocated, i.e. to the portion with the highest interest rate. I'd then be using the 56 day period interest free for the money i'd just spent on my shopping...

ViolaLass

Pay £1 more than than the minimum on all cards and throw ALL the rest at the one charging interest.

EssexHebridean

supasaverbob wrote: »

Thanks for advice so far. Am managing to pay debts comfortably but I could cancel some non-essential montly payments and pay more.

Further question on this strategy - if I paid for my shopping on the card then straight away paid that amount off from my bank account, would this reduce my interest because of the way payments are allocated, i.e. to the portion with the highest interest rate. I'd then be using the 56 day period interest free for the money i'd just spent on my shopping...

Honestly? You're over-analysing this. Yes you might potentially make a small saving, but the best way of dealing with it is, as others have said, is simply to throw every spare penny you can at it. If it were me, I'd forget using the card altogether for the time being, focus on budgeting, and just get as much as you can freed up to clear it down ASAP.