How best to use an Income Tax refund?

Glensman

I apologise in advance for this being a bit long winded!!
I have 4 credit card debts and a Tesco bank loan.
1st CC has a balance of £2474. £1575 of it is interest free until Nov 2018, £684 is interest free until Jan 2018 and the remaining £215 has just started attracting interest. I currently pay £30/month.
2nd CC has a balance of £2317. It is interest free until Sept 2019. I currently pay £30/month
3rd CC has a balance of £1141. Interest has just started. I currently pay £80/month
4th CC has a balance of £6078 and is interest free until Feb 2018. I currently pay £150/month
The Tesco loan has an outstanding balance of £23692.24. Interest rate is 3.3481% and the monthly repayment is £455.62. There are no penalties for early full or partial repayment.

I can currently meet all of these payments but when all other household bills are paid there is very little “spending” money left each month for anything.
Now the good news!! In a week or so I will be getting about £9/10000 income tax refund.
I would like some advice on how best to use it.
My initial though was to pay off credit cards 1, 3 & 4 and increase the payment on card 2 to £90/month which will just about clear it before it starts attracting interest. This means I have about £200 more “spending money” per month. This is not for frivolous spending but to ease the pressure of day to day living.
But now I’m starting to think about paying a lump sum off the Tesco loan, leaving the repayment period as it is and reducing the repayments. Then use that additional available cash to either increase the payments on the credit cards and, as they start to attract interest, move them to an interest free offer. This wont give me any additional “spending” money, I know but it will help me get clear from the Tesco loan much more quickly and pay less interest.

Are there any other courses of action which I should consider?

Thanks for taking the time to read ALL this!!

sourcrates

Hi,

I suspect the repayments on the Tesco loan will remain the same no matter how much you pay off it, you will reduce the term, but the payments usually stay fixed with a personal loan.

I would pay off the credit cards, or as many as possible, keep the balance that will remain interest free for longest.

Then, cut up the cards, and close the accounts down.

Keep one for emergencies maybe, but you then need to look at this as an opportunity to balance your budget better, and live within your means, without the reliance of credit cards and loans.

Glensman

Thank you for that. Seems like good advice.

"live wthin your means" I have been trying to do that all my life.......without much success!
I've made a few mistakes(and paid for them) but I am getting better.

sourcrates

Glensman wrote: »

Thank you for that. Seems like good advice.

"live wthin your means" I have been trying to do that all my life.......without much success!
I've made a few mistakes(and paid for them) but I am getting better.

You an me an everyone else lol

I do now though, twice insolvent tends to focus the mind somewhat !!