Can pay most of my credit card, but should I?

Risco

I have a 5 figure balance on my credit card. I will shortly be in a position to pay most of it off. The APR is 6.6%.

I have read the blog on here about using savings to pay off debt. I would like to purchase a house in the future and using my savings would leave me with no deposit.

I have estimated if I keep my current payments with reduced balance from savings it would take 18 months to pay off the rest of the credit card.

[Deleted User]

Pay it off and rebuild your savings with what you were wasting on repayments.

ZaSa1418

Definitely pay it off 

RobM99

If you pay it up, you'll save £660/£10,000 in interest per year. 
The payments you would have made can go into savings.
Only you can decide!

reliquit

As @RobM99 says, only you can decide. I'm in a similar position (albeit on a smaller scale) - I owe about £1700 on a credit card and I have £8.3k savings. I could easily clear the credit card, but the knowledge that I have that £8k "backup funds" is worth more to me than the savings I could make in interest. I've been in serious debt and I know how it feels to have NO money, and I don't ever want to be in that position again. For me it is about "peace of mind". Your mileage may vary.

penners324

credit card debt is expensive 'peace of mind unless it's on a 0% card.

MinuteNoodles

Risco said:

I have a 5 figure balance on my credit card. I will shortly be in a position to pay most of it off. The APR is 6.6%.

I have read the blog on here about using savings to pay off debt. I would like to purchase a house in the future and using my savings would leave me with no deposit.

I have estimated if I keep my current payments with reduced balance from savings it would take 18 months to pay off the rest of the credit card.

The answer is yes you should pay it off. The fact it'll leave you with no deposit is kind of moot because your existing loans and credit card balances when you apply for a mortgage will reduce how much a lender will lend to you anyway so you're in no different a position other than the fact you've paid a load of interest on the credit card balance you could have avoided.

Remember once you've cleared the balance the money you were paying is now free to be saved to rebuild your deposit and instead of say £100 a month of your income being set on fire and wasted as it is going purely to meet the interest payment of that card that £100 will now be able to contribute towards your deposit and also grow as it earns interest. 

By not clearing the card this is what you're doing to your money.

ChrisLV

I would recommend checking out episodes 589 and 600 of the podcast Radical Personal Finance. Those two episodes will give you a financial expert's long answer on when you should pay down debt and when you're better off retaining cash reserves and/or investing. The short answer, as with almost all things, is 'it depends.'