Where to start paying off credit cards...

OK.

I've had a bit of a blow out over the last few months restoring a car. As a result my credit card balance has grown to save the least!

I'm now in a position to start re-paying in earnest but don't know where to start.

I owe £4300 spread over 3 credit cards (Virgin 0% balance transfer for 9 months, Barclaycard 2.7% life of balance, and Capital One 3.9% life of balance schemes.), so they are cheaper than a loan.

I can afford to pay £490 a month to pay these off, which will take me 9 months if everything goes according to plan.

When I sold my car we made £2300 which we planned to invest in an ISA, but haven't yet. As my husband only knows about £1400 of debt, I've left this out of the equation.

So, do I just carry on paying for the next 9 months and not tell him (paying in turn Virgin, Cap One and Barclaycard). Or do I come clean and use the £2300 to pay half of the debt, pay off the rest myself, and then start making up the savings again?

Any advice much appreciated.....

P.S. Embarrassed to tell hubby because he is so good with money and has mega savings himself, which I didn't want him to use to bail me out.
New year, no debt! Debt free date - 02/01/07 :j :j :j :D

Comments

  • Murtle
    Murtle Posts: 4,154 Forumite
    First Post First Anniversary Combo Breaker
    if you have no problems paying off the 490 a month for 9 months then that's fine, but pay the minimum off each card each month and then put the rest of the money onto the highest interest card, in your case the capital one card. Although they are all low interest rates, evey little helps on the credit cards!! This helps cards being paid off quicker.

    In this case I would look at investing the ISA money in the ISA if the %interest rate on the ISA is more then you would get by paying it back.

    This is especially the case if the lower amounts are on the higher APR%

    HTH and makes sense!!
  • Alfietinker
    Alfietinker Posts: 562 Forumite
    Debt-free and Proud!
    Thanks for that. I did intend to pay off Virgin first (whilst still paying minimum on other cards) because it's on a 9 month limit, but your way makes more sense.

    I've just been thinking, and I am going to come clean with my hubby this week. Even though my money's mine and his is his etc, I feel he should at least know the situation. Then he can be involved in any decisions.

    You see, I've always been laid back about debt as everyone seems to have it. But hubby seems to have it much more sussed than me! And we want to start a family in a couple of years, which I don't want to do with any kind of debt hanging over me.

    Just going to be difficult broaching the subject!
    New year, no debt! Debt free date - 02/01/07 :j :j :j :D
  • Murtle
    Murtle Posts: 4,154 Forumite
    First Post First Anniversary Combo Breaker
    Congratulations!! I always think it's better to be open and honest then deal with things on your own - so long as your partner is nice about it!!!! You're not in a bad way at all and you have the means to pay it off so good luck!!!

    The method I described is known as snowballing....as you collect more money on the way to throw at other cards....if that makes sense!!!

    All the best

    x x x
  • citygal
    citygal Posts: 67 Forumite
    And we want to start a family in a couple of years, which I don't want to do with any kind of debt hanging over me.

    Coudn't agree with you more on that one Alfie- I too am hiping to start a family, but will ONLY start planning to do so when my debts are sorted (although as people tell me, even when you want to have a child it doesn't mean that it'll happen straight away) at least I'd be debt-free starting to do so :)
    Debt /Overdraft/Everything Free December 2007 :j
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