Savings or Debt Clearance

Sanctioned_Parts_List

I went the other way on this, and paid the interest-bearing debt off to the exclusion of all else, until it was paid, then split my savings between both emergency fund and remaining debt, once that debt was all interest free.

I worked on the principle that, having paid off a chunk of CC, the available credit was my emergency fund.

Thankfully, no actual emergencies occurred during that phase, so I can't tell you how well it worked.

getmore4less

CandyCupcake wrote: »

Hi getmore4less,


The Barclaycard is currently at £1517.34 @ 29.9%.


The MBNA is £2730.30 @ 0% until October 2020.


Thanks.

That looks like a standard spending rate

Unless you can get a cheaper rate I would not bother saving anything and throw every penny at the CC.

Just keep some available credit to cover any emergencies not on the budget

You do need to have a tight control over your budget and watch carefully what you are putting back on the card.

Just make/pretend your emergency fund is a virtual one(lower debt) that is paying 29.9% interest.

CandyCupcake

Thanks both for your responses.


We have a Halifax credit card, with a limit of about £1600 which currently has a £0.00 balance. I could see if we would save any money by transferring the Barclaycard credit card to it, then close the Barclaycard one down. This is now added to the to do list for tonight!


I really don't want to apply for more credit, as our mortgage is up for renewal in November so want to try and be in as good a position as possible.


I suppose I could throw all the savings at the interest accruing credit card for now, and then once that's cleared and there's only the 0% one left I could go down the 50/50 route...


I'm overwhelmed by everyone's help on this! So thanks again.

enthusiasticsaver

Normally I would say save an emergency fund but at 29.9% interest I would pay the Barclaycard off as priority.

getmore4less

CandyCupcake wrote: »

Thanks both for your responses.


We have a Halifax credit card, with a limit of about £1600 which currently has a £0.00 balance. I could see if we would save any money by transferring the Barclaycard credit card to it, then close the Barclaycard one down. This is now added to the to do list for tonight!

What rate is that card? any deals on it?
also watch out for min payments, some cards are higher than others.
Is this card still 0% interest free if paid of in full


I really don't want to apply for more credit, as our mortgage is up for renewal in November so want to try and be in as good a position as possible.

What are the details of your mortgage it may not matter?
(retention deals are the first thing to look no checks with those)


I suppose I could throw all the savings at the interest accruing credit card for now, and then once that's cleared and there's only the 0% one left I could go down the 50/50 route...


I'm overwhelmed by everyone's help on this! So thanks again.

What is your current amount to go towards debt?

The SOA is the key to getting on top of where all the money goes and a plan.

There may be an option here to reduce the high rate debt with a bit of cashflow juggling.

Chandelier.

When I had a sufficient amount of debt due to taking out a low interest loan to pay off my car, I would split payments between savings and paying it off towards the loan. Once I accrued a certain amount, I would make a lump sum overpayment and begin the cycle again. I always kept the balance to round figures and I was obsessed with seeing the balance go down.

Personally I would see if you are eligible for any 0% balance transfers and try to get the high interest CC onto one of them. Remember to keep an eye on when the promotional offers end.

You could total up the balance and divide it by how many months the offer is available for and set up payments to have the balances paid off by the end of the deal. You could also set yourself small targets to pay it off sooner. Every little helps.

Find ways to make savings or cut back in certain areas, its amazing how all the little things add up cost wise. Set yourself a budget to stick to and work your way from there. You can also save other funds aside to cover the cost of annual expenses, i.e. car insurance, mot, tax etc. I save a set amount of money each month to cover these.

Good luck on your journey and figuring out a plan that suits you. If you can get it all onto 0% then thats brilliant and will allow you some breathing space.

CandyCupcake

I have some great news!! Had a look at the Halifax credit card (we actually have a limit of £2600 on this, I thought it was £1600). Anyway, we had an offer of balance transfer at 0% for 12 months. So I've jumped on this to make both credit cards 0% woohoo! I really must thank you all, as without your responses I wouldn't have even looked into it!

Now everything's at 0% I'm going to do the following to pay them off:
1) 50/50 between EF and Barclaycard until EF hits £1000, then everything will go to the credit card
2) I base our budget on the lowest we could possibly receive. My partner is paid weekly and virtually every week picks up more than I budget for. I get paid monthly, and again usually pick up more than I budget for and will also get a pay rise in March. Anything we earn over what's budgeted for will go to the Barclaycard, then to the MBNA card
3) I bet match (I hate gambling so make a pretty good bet matcher), so I'm going to start paying any profit off the credit cards. I usually make between £200-£400 doing that so that would really help

And to motivate me to see the balances go down, I'm going to restart my diary on here to keep me on track.

Seriously, thank you all so so much! This support from you all is what I needed

[Deleted User]

That's great news!

Dxxx

getmore4less

What was the BT fee?

Should BC now be Halifax?

Now it is all 0% get the best savings rate, min payments on the card and savehe rest ready to hit the cards when the 0% run out.
Have two saving accounts if that helps one EF one for the CC.

The card you cleared might get new deals so hang onto it for a bit.

EssexHebridean

Well done Candy - that's great work!