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Considering Cosmetic Surgery. Funding Advice Please?
edited 10 May at 11:41AM in Loans
19 replies 2K views
I'm considering getting "some work done" and I have a hypothetical question, how should I fund it?
Background: Towards the end of last year I went to the bank to see if it was possible to get a loan. I have never borrowed money before but tended to live in the red a bit in terms of overdrafts but nothing that wouldn't be more than cleared by the next pay day (I'm paid weekly). I was declined but apparently I was "borderline" and I think had I asked for less I could well have got it.
So, I got the Banking App on my phone. I have a savings account as well as my current account. The former has had a positive balance for years but the latter occasionally slipped into the red ("free" overdraft) so now I use the App to transfer money across as I need it, usually about £20 - £40 per week and then "pay it back" when my wages go in. I also shove on average £60 per week or so into my savings account as, despite being on minimum wage, I have a surprisingly large disposable income.
This financial prudence has paid dividends as far as my credit report goes. I have always had a good Credit Score but a lowish credit rating thanks partly to not having any repayment history and the persistent but not permanent overdraft. In February, I applied for a Capital One "starter" credit card which I deliberately used to buy shopping one week, fuel the next and pay off the balance when my wages go in, rarely leaving a balance for the following week. I was then invited "pre-approved" to get another one which I duly did and now alternate between cards, spending on one one week then the other in alternate weeks, always paying off at the end of the week. A couple of weeks ago I treated myself on one of the cards but paid that off in two weeks, just before the monthly statement was due. As a result, my credit file now indicates a good rating but the only thing letting me down is the fact that the credit is a bit new and that for optimum rating I should look at increasing my available credit to £4,000 (currently £2,500 across the two cards). Should I apply for another card or apply to increase my limits bearing in mind they are both less than 6 months old?
So back to the question:
The cost of the "proceedure" is going to be just shy of £4,000, of which I have £2,500 saved. I also have available credit to the tune of a further £2,500 so the operation is affordable, but how should I fund it?
It's a given that I should fund some of it on my credit card for section 75 coverage but should I sort of max out the credit cards and leave £1,000 in my bank "for a rainy day" for example?
The way I see it I have five options:
1. Full savings + £200 (say) credit card + Bank Loan (assuming I could now get one).
2. Full savings + credit cards.
3. Partial savings + credit cards.
4. Partial savings + some credit card + loan.
5. Pay the deposit with a credit card (£500) then fund the rest with a loan, paying off the credit card a week or two later from my savings.
Bear in mind that I would be off work for some time afterwards* and so still need to service direct debits etc from SSP. I pay no rent or mortgage and get water, gas, electricity and broadband paid for by my boss (I live in staff accommodation) but I do pay mobile phone, Sky TV and running my car (DVLA by DD and Insurance already paid for until next May), also I have a weakness for shoes... My SSP should cover my bills but I will need to eat and pay at least minimum balance on my credit cards. Also bear in mind that I am likely to have at least £3,000 in savings by the time I am asked to pay for it. Depending on how long the "lockdown" continues, I may even have the full amount.
I look forward to your ideas.
*I sort of thought six weeks SSP followed by two weeks paid holiday.