Pay off credit card with this month's spare cash and leave nil in bank?

happysnappy25

Hi
I've been browsing for a while.
Had issues with debt for years, slowly slogging my way out! There is no point in me posting an SOA, as on paper I could be out of debt in a few months but my issue is poor budgeting/spending/impulse control, maybe related to mental health/stress which causes a lot of waste! I can undo weeks of progress and self control in days. This is something that only I'm responsible for, nobody else can change it!

Anyways my only two debts are now - Vanquis 39.9% £1090 (still this month's interest to add in plus £120 DD due)
- PayPal 0% until July £270

Having regained control of myself, I realise I will have a bank balance of £1025 after Payday this month in 10 days, this is the extra AFTER all commitment to bills/direct debits but not food etc. for next month

I have considered paying this amount in full to Vanquis, but would then need to use the card to buy food and essentials for the month - which I would try to keep to a minimum (I reckon I could keep it under £500 with self-control) I can't help but feel nervous that this is a silly or dangerous thing to do - leaving myself nothing at all in my bank accounts? But it would save me a fortune in interest and might break my spending cycle - I hate using my credit card and I'd think twice about spending anything if it was putting me in debt!

There is nothing life threatening that we need, although because of my poor money management and no savings alot of the things in my house are now needing replaced at the same time (washing machine has given up today but not quite checked properly how fixable it is, fridge/freezer door falling apart and too old to be worth fixing, TV dodgy and have to wiggle cables to get the picture, worn threadbare freying carpets,  chipped furniture, broken bed slats, redecoration needing done, car 10 years old and something new wrong every month). I also feel like my kids are losing out, they are desperate to get some electronic devices and nike air shoes like their friends but I guess we just can't afford these with other priorities! I feel like I need to get a plan in place for the realistic things asap, as not having them done makes me more likely to feel stressed and impulsive! I wonder how anybody manages to keep on top of and plan for all these things all the time?

I am a single working Mum and have 2 children, 1 who needs extra care and can often cost me more e.g. clothes for sensory problems, activities to give me a break. But I am only mentioning this, as some of the money saving ideas/making ideas I have realised are just impossible for me to find the time/mental energy like batch cooking from scratch, selling old things on ebay, upcycling old furniture etc.  But I work as many hours as I can manage, always compare and reduce my bills, it's just my spending that hasn't been healthy or things constantly crop up!  I have a really manageable income/expenditure, just poor management!!

I never learned to budget money, or control myself, and am learning my lessons now at almost 30, with 2 kids!

Sorry I have completely gone off on a ramble now! Thank you for looking and advice about the credit card/any other advice welcome!

MidsHollie

Hi there,
I really struggled with that time in life when you want to stop spending on your card but you also need to learn how to budget. 
I suspect that for you, having a £0 balance on your card and then needing to spend on it would be difficult. I'd suggest that you work out how much you need until next payday and keep that separately. You may keep this as cash, in your normal account, or in something separate. I use a Monzo account for this purpose as I get a notification for all spends, and I can pull money out of 'pots' as needed. You can then pay off the left over ammount that you haven't budgeted elsewhere to your credit card. I'm sure if you did this you could pay the card off in a few months. 
You really should think about cutting up the credit cards and getting rid of them. Impulse spending will be much more difficult that way. Good luck!

Willing2Learn

Hi,

I totally recommend that you do post up your SOA, as we will be able to take a detailed look at your monthly income, expenses, debt repayments and assets.

If you post up your SOA you will get absolutely bombarded with money-saving tips, advice, guidance and support.  You cannot go wrong with an SOA    That is a good thing

monetxchange

It doesn't make sense to me to clear your card and then leave yourself without money to spend on essentials, therefore meaning you need to use the card again. You're not actually clearing any debt if you just run it back up again, so I'd be wary of tricking yourself into thinking that.

Why not budget tightly and see how much money you need this month and then throw the remainder at the debt? Then cut up the credit card. It's much easier to spend on credit when the money doesn't feel like yours - much harder to force yourself to do when it's coming out of the current account and there's nothing left once it's gone! Would second the previous poster's recommendation to get a separate spending account like a Monzo. Helps to keep an eye on spending.

Debt clearing is all about balance and learning to work out how much you really need to live on in your budget. I know how dull it is at first, but you will need to tackle overspending if you're ever to remain debt free. After a while, limiting yourself to your budget will become second nature. Good luck!

Socajam

I also feel like my kids are losing out, they are desperate to get some electronic devices and nike air shoes like their friends but I guess we just can't afford these with other priorities!

These are "wants" not "needs".
You as the adult are going to have to determine how you go about dealing with this.
For me personally, I would not be buying any of these things until I have at least some money in the bank that could be classed as an emergency fund and a life happens fund.
Having these may make the children feel good, but at the end of the day, if something were to happen as you now realize, you have nothing to fall back on.
I am not criticizing you, because I have been exactly where you are and have had to learn a hard lesson to get myself to where I am today.  Talk about working and not even having a a box of teabags in the cupboard to make tea - that was me.
Budgetting is hard, but once you start seeing the money build up in the bank, it really give you a sense of purpose that you are moving in the right direction.
If you can really squeeze it, I would pay 545 towards Vanquish this month and the remainder next month. You can then clear the other card. Once you have done this, if you are now left with 1025 every month, save 50% of that in an untouchable account - that should be your two funds.
If we are allowed to venture out, take the children for a treat (something you can do once a month) until you are in a more comfortable position.
I am not sure how much home cooking that you do, but you could save a lot of money this way. 
Bake banana bread or muffins and freeze them - that's breakfast.  If you are using the oven, bake a chicken along with lots of vegetables etc  - that's dinner for 2-3 days.
In order to save etc, you are going to have to become very creative.  Good luck, you can do it.

enthusiasticsaver

No I would not clear out your bank account to clear the card then start spending on it again. Those who struggle with financial discipline often see an empty credit card as a license to spend so you may not impose sensible spending limits.  The fact that you are talking about expensive brand items for your children you clearly cannot afford indicates to me that you are not yet totally in charge of your spending. Make a sensible budget, leaving some free to save for emergencies and any spare income throw at the Vanquis.  Get out of the habit of using the card totally and focus on building up some savings. 

monetxchange

Also, your children will not look back on their childhood and think "it was amazing because mum always bought us expensive gadgets and fad clothes at will". They're more likely to remember a happy parent, and all they'll have is the image of you being stressed and struggling if you carry on with that way of spending. And they're never too young for financial lessons to ensure they have good money sense - they want something pricy, they save their birthday and Christmas money, get a part time job, learn to do chores in exchange for pocket money and save up for it! Helps avoid them being entitled and realising early on that if you can't afford it, you can't get it.

fatbelly

Can you not get a free £500 overdraft with your bank?

https://www.moneysavingexpert.com/news/2020/03/uk-coronavirus-help-and-your-rights/#overdrafts

Emmia

fatbelly said:

Can you not get a free £500 overdraft with your bank?

https://www.moneysavingexpert.com/news/2020/03/uk-coronavirus-help-and-your-rights/#overdrafts

The problem with any overdraft (even if at 0%) is that it still needs to be repaid - in many ways it is effectively another 0% card, with a low maximum... I had an overdraft of this size on my student account when I left Uni, and on my fairly low income at the time, it took me 6-7 years, to finally have enough in the bank to no longer need it (and I closed the account associated with it). 

These days (personally), I keep my agreed overdraft to £100 on 1 account only.  £100 is usually enough to cope with any unexpected expenditure, whilst avoiding a significant knock on effect into the following month. 

[Deleted User]

I considered this myself, should I allow 2 months interest free overdraft pay of the cc. however I reckoned the bank would probably have much more say over a subprime credit card, in the line of this becomes repayable on our sayso for a £200.00 overdraft, but this was recently a line straight out of a subprime providers mouth. (yes they tried telling me their balance was repayable any time on demand)
A subprime credit card which allowed my pet some peace after death and which helped when hit with bailiff fee's despite never having been near a court and certainly no-one knew much last May culminating in at least two lots of £240 is the reason, why I'll pay interest and overpay, morally the right thing to do, until the moment I lose my job is how I see it. I also get that no-one is entitled to hold a credit card these days for absolute years so be careful thinking that is a long-term usable net, no one is exempt from paydown plan, unless you can do what the CC provider says and clear entire balance on demand.