Taking payment holiday to clear smaller debts?

gettingtheresometime

OP

I'm so glad you've posted this question as I've just been granted a payment holiday on my Halifax & mbna cards & I intended using the money freed up to pay off my Aqua card which has an extortionate apr on it.

bamgbost

Yes OP... I intend to do the same. Take payment holidays, and reduce outstanding debt.

It a smart idea

allwellandgood

BabyStepper said:

 Do they keep charging interest during the holiday period? Hopefully not but maybe worth finding out. 

Good luck!  

The holiday period for the credit cards means that no payments need to be made and it will not affect your credit score but interest will continue to be applied unfortunately

BabyStepper

Thanks for that, allwellandgood, maybe the OP can include that in the cost calculations. 

maybells

BabyStepper said:

How much are you paying in overdraft fees at the moment? Excellent idea to make use of the £500 interest free overdraft option at the moment. I wouldn't feel bad at all about using that or the loan holidays, that's what they're there for. 

If, like me, you enjoy fiddling with pennies, then you could work out how much you would be saving by taking the loan holidays. Do they keep charging interest during the holiday period? Hopefully not but maybe worth finding out. 

Good luck!  

This is going to sound awful but I’m not sure! I have been charged £22 for my £500 Santander O/D. No idea about HSBC. Starling is around £8 for a £750 O/D. And Monzo is about 50p a day. It cost around £15 when I had a £1000 O/D with them.

To be honest, I’m not looking at the current interest rates. I’m just worried about how much it will all cost when they jack the rates up.

I also like the idea of paying off the smaller debts completely when I can and just focusing on the bigger ones. It’s nice when you only have to worry about two debts instead of seven!

They do keep charging interest during the payment holidays! But paying off all my O/Ds and Barclaycard means I’ll have extra cash so I’m hoping to make bulk payments to the loans and work to pay them off early.

maybells

gettingtheresometime said:

OP

I'm so glad you've posted this question as I've just been granted a payment holiday on my Halifax & mbna cards & I intended using the money freed up to pay off my Aqua card which has an extortionate apr on it.

I’m surprised nobody has posted it before! Fortunately I have been successful in applying for the holidays for my two loans. It will be nice to clear a bunch of smaller debts in three months! 

Oh, the dreaded Aqua card! Yeah, best to get that paid off ASAP. Hate this virus and what’s happening to the country and the people but I’m so grateful I have this opportunity to pay a few things off and tidy my finances in general.

enthusiasticsaver

I think your idea is sound. Just make sure you cancel the overdrafts once repaid so you are not tempted to go down this road again. 

maybells

enthusiasticsaver said:

I think your idea is sound. Just make sure you cancel the overdrafts once repaid so you are not tempted to go down this road again. 

Thanks!

I got paid two days ago and I took GREAT pleasure in paying off the Monzo overdraft and then cancelling it! Paid £500 to HSBC. Even managed to scrap together another £250 to pay Starling! So now, I have the following overdraft amounts outstanding:

HSBC: £500

Santander: £500

Starling £500

Going to completely pay off HSBC and Santander next month and cancel both of those overdrafts.