Help with savings - Goal to buy first property

Bringvaluetome

Thank you, I did see that part about the withdraw penalty. 
Any advice on the credit card debt? What would others do in my position? 

Bringvaluetome

Also, another question - Potentially I could drop a lump sum of £4000 on or before 5th April 2021 and still get the £1k bonus?

eskbanker

Bringvaluetome said:

Thank you, I did see that part about the withdraw penalty. 
Any advice on the credit card debt? What would others do in my position? 

There's no harm in leaving it as interest-free debt if you're simultaneously saving, but it would be worth ensuring that you're in a position to pay it off in the event that you're unable to shunt it over to another deal when this one expires.  In the context of accumulating a house deposit, it would be better to have paid it off by then, so keep concentrating on your net position of savings minus debts, and think about the position you want to be in when applying for a mortgage.

Bringvaluetome said:

Also, another question - Potentially I could drop a lump sum of £4000 on or before 5th April 2021 and still get the £1k bonus?

Yes, but dangerous to leave it until the 5th itself, as evidenced by some posters missing out by depositing after a deadline of the 3rd, which was the last working day of the 2019/20 tax year!

Bringvaluetome

So following the comments yesterday, it's really made me think about how to shift the credit card debt. I have now allocated some savings and that will bring the balance down to around £2845.
Then it would be 9 payments of £316 to clear the balance before the 0% period ends. Does that sound like a plan?

eskbanker

Bringvaluetome said:

So following the comments yesterday, it's really made me think about how to shift the credit card debt. I have now allocated some savings and that will bring the balance down to around £2845.
Then it would be 9 payments of £316 to clear the balance before the 0% period ends. Does that sound like a plan?

I wasn't really advocating rushing to pay off the card debt asap - it's 0% until next April so it would make sense to keep earning interest on your savings until then (effectively stoozing).

Best situation would be to maximise interest on all your pot between now and April and then be in a position to pay off the card in full and get £4K into a LISA before the new tax year....

DiggerUK

Whatever plan you follow, get rid of the CC debt. Having that card will also provide access to emergency funds if needed, ask for an increase, or better still get another providers 0% CC. Rainy day funds need be no more than a  'cash in hand' balance.

Once you get your mortgage make clearing it your only financial priority, best of fortune..._

Bringvaluetome

Thanks for the replies. The card has a £5k limit so pretty much maxed it out. It is also having a negative effect on my credit score - Over 50% credit utilised. 

Bringvaluetome

Thinking of putting £1045 in to credit on pay day this month. Then will be down to £1800.
9 payments of £200 will clear it. I get £200 a month back from friends loan, so it pays for itself. 
Interest paid on money in bank is peanuts and compared to the peace of mind that I'm close to debt free is worth may more than a few pounds interest accumulated. 

eskbanker

DiggerUK said:

Once you get your mortgage make clearing it your only financial priority

Probably rather early to be offering that advice but in any case it oversimplifies - many do get a psychological benefit from being completely debt-free but from a purely financial perspective it's not necessarily the most sensible route to adopt.  OP may find that, as with many others before them, mortgage rates are significantly lower than the return available from other choices such as investments (standalone or within pensions) or even savings, so when making a long-term financial plan it's best to recognise that there will be a range of available options, some of which may be financially better than prioritising full repayment of a mortgage.

Bringvaluetome

What about cashing out the HTB ISA and clearing the credit card? If I'm going to get a LISA then no harm?