Thoughts please :)

bigbeff

Hi all, 
I am in a situation where come payday at the end of the month, I will be free of my overdraft - Yay!! Finally after however many years - and I plan to stay that way   
My question is what do I plug away at next? I am part self employed so one month I can have a lot more than other months. I have a credit card with £3150 on (0% for another 18months I believe (or thereabouts)) which I am already paying £100 a month on or I have a mortgage which is 1.79% at the moment. I'm slowly building up a back up fund as there is a possibility I may want to move in the next 12 months and it's always good to have back up. But any spare, should I put on mortgage or credit card? Which would look better if I want to move? And which will save me more money in the long term? 
Help - what would you do? I generally have about £500 to play with and plug in somewhere. 
Thanks in advance

TheAble

Definitely pay off your credit card. Even at 0% it's a liability you want to be free of as soon as possible. Much better for your peace of mind (and balance sheet)

enthusiasticsaver

Excellent progress on getting rid of the overdraft. I would do a mix of both if you have money spare.  As the credit card is interest free for another 18 months  it is not costing you anything now but if you plan on moving then I would focus on getting that down and building up savings.  In terms of what looks better on a mortgage application having no debt is best. Overpaying the mortgage though gives you more equity. However given you are not paying interest on the credit card but you are on the mortgage overpaying that will save you more money providing you can clear the credit card by the time the 0% deal expires.  So in conclusion I would up the credit card payments to  £300 to clear it in 10 months so by the time you  want to move and either save the other £300 (if you have £500 spare on top of the £100 you already pay to the card) or overpay the mortgage. 

gwynlas

If you are planning on moving you should pay off your credit card before appling for new mortgage and build up funds for moving costs. Paying more off the mortgage is going to give you scant return over 12 months.

bigbeff

enthusiasticsaver said:

Excellent progress on getting rid of the overdraft. I would do a mix of both if you have money spare.  As the credit card is interest free for another 18 months  it is not costing you anything now but if you plan on moving then I would focus on getting that down and building up savings.  In terms of what looks better on a mortgage application having no debt is best. Overpaying the mortgage though gives you more equity. However given you are not paying interest on the credit card but you are on the mortgage overpaying that will save you more money providing you can clear the credit card by the time the 0% deal expires.  So in conclusion I would up the credit card payments to  £300 to clear it in 10 months so by the time you  want to move and either save the other £300 (if you have £500 spare on top of the £100 you already pay to the card) or overpay the mortgage. 

Thank you so much. I was thinking about that. I'm upping my direct debit on cc as we speak 😊

MovingForwards

Clear the CC, it will look better with affordability, especially being S/E.