What would Martin say?

Lakedistrictlover

I am getting £30,000 lump sum inheritance. Do I pay off amounts owed to credit cards with some of it, even if they are at 0% interest? Is it best to do that to lower my outgoings from my current account? Or do I only pay off things that are costing me interest fees and leave as much as I can in the bank (although I know interest on savings is rock bottom still). I would be glad of any advice on how best to manage it.

18cc

From a purely financial point of view you are better off putting the money in a savings account and getting say 1.4% whilst leaving your 0% credit cards being paid off monthly

however it is not that simple as you may prefer the peace of mind which comes from being debt-free or at least paying off as much credit card debt as you can with the money

personally that is what I would do

Lakedistrictlover

You'd do what, I am not sure... pay off the cards?

deadendwaterfall

I'd pay the cards off in full.

Vet

pay off the cards... 100%

JuicyJesus

He'd say "I cannot give direct financial advice as I am a journalist who is not authorised to give financial advice by the FCA."

That or "spend it all on drugs and women".

Zero_Sum

If cards are 0% then i'd just earmark the cash to cover cards & get a bit of interest.
As long as you dont spend the money again it makes no sense to pay off 0% debt when you can earn 1.5% on the cash instant access or upto 2% on a year fixed rate.
Or even more if you stash it in multiple bank accounts who pay decent rates upto certain values

enthusiasticsaver

It would depend on other factors. Do you have a mortgage as presumably that is costing you interest? When do the 0% deals expire and will they be paid off within the term? Have you maxed out high interest current accounts to gain best interest?

Lakedistrictlover

not sure what you mean, earmark the cash.... are you saying stash the cash and not pay off the cards?

Lakedistrictlover

No mortgage. One of the cards will be paid off if left to run full course till the zero interest expires, the other one has more on it therefore it won't be paid off in time so I would need to switch. Trying to budget better in the current account that is why I wondered whether to pay off the cards so there was less going out of the current account each month. Therefore less chance of me dipping into the lump sum. Not that good at working stuff out though so glad of all advice.

Sharon87

So instead of switching cards when the deal runs out that's when you use the money to pay the remaining balance of the card.

If you're not good at organising things financially it may be best to pay off the debts now so there's no temptation of spending the money. Either way it's up to you.

I personally would put the money in a savings account, but I have spreadsheets galore and a budgeting app to manage my money so know where everything goes. If it was me 5 years ago I'd definitely pay off the cards!