Repay or Save?

CJAVT

Hi everyone,

Please don't judge... So long story short, I moved out before I could afford to and took out a number of credit cards which quickly spiraled. I am now finally in a position where I have a detailed repayment schedule, to get completely clear of debt in roughly 6 months (with very strict budgeting).

The thing is that I also want to save for a house deposit using a lifetime ISA. I have recently opened a LISA, and really want to put in as much as possible this tax year. I don't have that much time with there being less than two months remaining. 

My options:
- To continue with my repayments as normal, and not put away into the LISA (I have to admit, my least favourite option as I want to benefit from the 25% bonus) 
- To delay my repayments by 2 months and put what I can into my LISA, but I am paying a hefty interest rate on one of my credit cards, so would result in an additional £70+ish worth of interest.

I am currently thinking about applying for a balance transfer card, it has been over a year since I last applied for a new credit card, but I do have 5 active credit cards (I've checked none of them have available balance transfer offers). The credit limit of all cards combined is £27,450, my utilisation is currently £7,700 so I'm using under 30%. (Is this too many CC's? Too much available?) I've checked my MSE Credit Club, the top suggested BT card is Tesco Credit card, gives a 70% chance of approval. 

It will be at least June 2021 before I will be trying to secure a mortgage, so would that be enough time for the application to age?

What would others suggest?  
Thank you for reading!  

afis1904

You want to get a mortgage in June next year without having any savings right now? Because if you do, use these to repay your debt.

If not, I'd try to get a balance transfer on the most expensive card and repay as much per month as you need to repay your debt whilst simultaneously saving.

CJAVT

It would be June at least, but most likely nearer to the end of the year. It would also be with my partner, he has some savings already, I just want to be able to pay my fair share. This is just our goal at the moment and I figured a 25% bonus on say £2,000 towards a deposit, is more than the interest I'd pay in the short term. 

afis1904

It is and in your specific case it might be worth it if you can take the short term hit (although usually it won't) but ideally I'd still look to transfer the balance.

coachman12

CJAVT said:

Hi everyone,

Please don't judge... So long story short, I moved out before I could afford to and took out a number of credit cards which quickly spiraled. I am now finally in a position where I have a detailed repayment schedule, to get completely clear of debt in roughly 6 months (with very strict budgeting).

The thing is that I also want to save for a house deposit using a lifetime ISA. I have recently opened a LISA, and really want to put in as much as possible this tax year. I don't have that much time with there being less than two months remaining. 

My options:
- To continue with my repayments as normal, and not put away into the LISA (I have to admit, my least favourite option as I want to benefit from the 25% bonus) 
- To delay my repayments by 2 months and put what I can into my LISA, but I am paying a hefty interest rate on one of my credit cards, so would result in an additional £70+ish worth of interest.

I am currently thinking about applying for a balance transfer card, it has been over a year since I last applied for a new credit card, but I do have 5 active credit cards (I've checked none of them have available balance transfer offers). The credit limit of all cards combined is £27,450, my utilisation is currently £7,700 so I'm using under 30%. (Is this too many CC's? Too much available?) I've checked my MSE Credit Club, the top suggested BT card is Tesco Credit card, gives a 70% chance of approval. 

It will be at least June 2021 before I will be trying to secure a mortgage, so would that be enough time for the application to age?

What would others suggest?  
Thank you for reading!  

Why not add another option to your list, CJAVT ?  You say " I am now finally in a position where I have a detailed repayment schedule, to get completely clear of debt in roughly 6 months (with very strict budgeting)."  Why not just stick solely to that plan and succeed with it, rather than thinking of taking yet more trouble Credit Cards. Then, in view of your history, leave Credit Cards alone for some time and learn from past mistakes. And in due course, start a new financial life with the benefit of hindsight ? Good Luck.

On_my_way

You need Dave Ramsey- stick you tube on and listen to his baby steps and philosophy while you sort out anything that you can sell. 
You need an emergency fund but other than that it makes no sense to have savings while you have debt. Use savings to get rid of debts one at a time