New job! Pay off debt!

katie4

Hi Everyone
I'm new here
we have loans and credit cards we struggle to pay the minimum every month and usually end up borrowing off family


i worke two days a week up until this week. i have just been made full time which means a pay increase of £800 a month!


i can finally see the light to the end of my debts and im excited but what is the best way to pay off the debts with this money?


snowballing? any other option?


Plus will my credit score increase with each debt that is paid off?


Once the cards are paid off should i close the accounts or keep them open?


thanks in advance everyone


Loan £300
Loan £450
Credit Card £4,000
Credit Card £3,300
Credit Card £1,200

National_Debtline

Hi katie4


It's certainly good news to hear you've been made full time. The first thing I would advise you to do is complete a statement of affairs (SOA) based on your increased hours, you'll find one in the sticky at the top of the board. You need to make sure you can afford all your essential outgoings and the minimum payments on your debts.


If you can, and you have money left over, it's generally best to concentrate on paying off the debt charging you the highest rate of interest first. Once you've done that move on to the next most expensive debt, and so on. Also consider whether you need to set up payment plans on the family debts.


Try not to be too concerned about your credit score, as the score the credit reference agency could be completely different to the score a creditor gives you. A creditor will be interested in your credit history (as well as other factors, like if you are on the electoral register) and having debts paid off should go in your favour.


Susie
@natdebtline

ReadingTim

Snowballing will be the cheapest way to pay off all of your debt, so in terms of pure mathematics, that's the best way to go. However, some people may prefer other strategies to maintain their motivation levels - say clearing off loans, cards etc, so concentrate on the ones with the lowest balance first - "one down...three to go...etc"

Cut up the cards and close the accounts otherwise you run the risk of getting back into the same position again - many do.

Don't worry about your credit score - that only comes into the equation if you're trying to borrow money, which you're not, are you?

katie4

ReadingTim wrote: »

Snowballing will be the cheapest way to pay off all of your debt, so in terms of pure mathematics, that's the best way to go. However, some people may prefer other strategies to maintain their motivation levels - say clearing off loans, cards etc, so concentrate on the ones with the lowest balance first - "one down...three to go...etc"

Cut up the cards and close the accounts otherwise you run the risk of getting back into the same position again - many do.

Don't worry about your credit score - that only comes into the equation if you're trying to borrow money, which you're not, are you?

no definitely not looking at borrowing money im just aware that our fixed mortgage rate ends next year so we'll be looking at getting a new deal then