Advice to pay off credit card a bit quicker

monday_blues

Hi, I was just after a bit of beginner's advice please.


2 credit cards, one with £850 and one with £900 balance on, with high interest of 34%. Min repayment on each is £30 and currently paying £75 each.... don't have enough money to pay them off in full however, could pay up to a max of £1,000, but need the £1,000 back in my account by beginning of May...


am getting myself confused trying to work out if this would be worthwhile to do, to save interest & pay off quicker, but since I need the £1,000 at beginning of May would need to re-save that before then too. Hope this makes sense


Dec-May = 6 months
2 x £75 = £150 x 6 months = £900 (this is what I would be paying to credit cards within this timeframe, obviously interest to be taken off)
* should I use some of the money I have set aside for another purpose to put to one of these cards to minimise interest i.e. pay £500 off one card which would bring balance down to £350 (less interest to pay) ... but for the next 6 months instead of paying £150 per month to credit cards, I would only have £67 to pay, as would need to put £83 towards repaying the £500 in time for beginning of May


or would there be no benefit in doing this?


Thanks for your help

onlyfoolsandparking

Its good your thinking things through I do it all the time but I think you might be over thinking this.


I would pay as much as possible to both cards without putting your 'cashflow' at risk, the balances are not super high thankfully but high interest is always gonna be a killer.


Are you in a position to apply for another card, maybe a long term balance transfer from a mainstream lender like Barclays, Virgin or MBNA, if so that would be your best option, if not just pay as much as you can afford each month, as long as its over the minimum your not technically having debt problems.


Try the MSE eligibility predictor and even if it comes up with low percentage chance of being approved apply anyway you never know.

monday_blues

Thanks so much, just wanted to put it out there and see what people thought, as keep going back to the same question in my head!


Unfortunately wont be eligible yet for balance transfer card, but will bear in mind for the future

pop18

Do you have a close friend or family who could lend you the full £1750 to pay in lump sum. Then you setup a standing order to pay them 75.00 per month without fail interest free.

Terry_Towelling

Are you able to say what you need the £1000 for in May? Is it something that could be paid by credit card? If yes, please read on.

I was just thinking that you could clear the £900 balance completely and £100 of the £850 balance with your £1000 savings. You could then throw £150 per month (2 x £75) at your remaining debt until the end of next April.

Come next May, make your £1000 purchase on the card.

OK, it looks like you'd only be deferring your debt with this approach but the intervening months of lower debt would mean less interest for a time and may make you more attractive to lenders with 0% BT/Purchase offers which you might then utilise.

You need to consider the fact that the £1000 savings would not be available to dip into in case of emergency using this strategy.

Craig1981

pop18 wrote: »

Do you have a close friend or family who could lend you the full £1750 to pay in lump sum. Then you setup a standing order to pay them 75.00 per month without fail interest free.

my own strong opinion on this is dont

money and family/friends never mix very well. yes, if you are destitute and nowhere else to turn, family would usually help out, but doesnt seem so in this case

monday_blues

thanks for all your advice. i don't want to ask anyone for help. i feel confident enough to be able to get rid of it on my own, just wondered if i could trim a bit of interest off by using this £1,000