Which credit card to pay a lump sum to??

Clueless56

Does Sainsbury's send you 0% offers - it appears to have 0% offers available?  If so, I would pay off the Sainsbury CC in full, pay the £135 balance to the NatWest CC and increase your monthly standing order by the £70 you have been paying to the Sainsbury's card. After a month, look to see whether you can do a balance transfer of all or part of the NatWest balance to a 0% rate with Sainsbury's.   I have done similar in the past, albeit with different card companies from these.  Once you have secured a new 0% rate, you can look at how much to pay each month.  You will likely need to do another balance transfer in the future if you can't afford to clear it in the 0% period, but with a good payment history and provided you don't run up more debt in the meantime that should be easier as the balance should be lower and hopefully your income higher/nursery fees lower or finished by then.

mcpitman

Duplicate thread

https://forums.moneysavingexpert.com/discussion/6324233/which-credit-card-to-pay-a-lump-sum-to#latest

swampduck

Have you tried the Snowball option on the Lemonfool or What's the cost? This will show what will or can happen - if you snowball your debts.
Where your Natwest card is part 0% and part interest bearing for the purposes of the snowball I would split these down so you effectively have 3 amounts.
You have the advantage that some of the balances are 0% so maybe you could pay down part of the balance which reduces your monthly payment anyway - which also eases the pressure on your finances.
But something else to consider is that if you pay the minimum on the Sainsburys 0% and put the difference that you would have paid to Natwest. In the interim period of the remaining 5 months to May 2022 on Natwest - you could have thrown another £40 at it in addition to your minimum payment and by the end of the June 2023 this could be as much as £270 extra. As this is interest bearing the less interest you pay the better for you. 
As others have said you may then be offered additional 0% Balance transfer offers on Sainsburys or another alternative card giving you more opportunity to make your money more effective. 
Finally - if your income has reduced to part time - have you considered applying for Working Tax Credit? It could be worth a try. Turntous or something similar on MSE - have forms you can fill in to see if you could be eligible.

I'll shuffle off now!!

kazwookie

£3k off Nat West is what I would do.

ZaSa1418

I would pay the 3k towards the Natwest credit card 

enthusiasticsaver

SumacRoastedStrawberries said:

Hello, 

I racked up some debt on two credit cards while on mat leave and over the past 18 months or so. I was recently given £3000 cash by a relative.

I'm on a reduced income having gone back to work part time and the monthly payments take a real chunk out of my budget each month (as well as bloody nursery fees).

I wondered if you clever people could help me to understand which card should I pay the £3k to (or maybe a bit to both?) to reduce my monthly payments the most? 

Card 1 - Sainsburys 

Balance - £2865 

This was a Balance transfer and is on a 0% rate until June 2023 

Minimum payment is £64.47 I currently pay £70 p/m to this card 

Card 2 - Natwest 

Balance - £5304

Of which £3052 is on a 0% Balance transfer until May 2022, and £2,252 is at an annual rate of 18.276%

Minimum payment is £78.45 and that's what I am paying at the moment. 

My instinct is to get rid of the Sainsburys card completely but I think the clever thing to do would be to pay the vast majority of the money to the Natwest card and get rid of thr Purchases amount which is costing me interest? 

Thanks so much for any advice, please let me know if I've missed any info.

The best use of the money would be to clear the £2252 on the Nat West card which is charging interest and costing you £34 each month so of that £78 you are paying only £44 is reducing the capital balance.  Given that the deal expires in May of this year anyway and the Sainsburys card runs until 2023 I would put the whole £3k towards Nat West.  I get that you want some breathing space in your budget but getting rid of the interest charging debt is the most efficient in the long run.  Your monthly payment to Nat West will go down but you will need to do a BT deal in May so getting the balance as low as possible means a lower BT fee.  

kimwp

3k to Natwest, then pay as much as you can to Natwest with the minimum to the other card. Look for a balance transfer to transfer the balance on the Natwest card when your 0% offer runs out. At that point (probably) pay the most towards whichever has the shortest time to the deal running out (best to come back here to check)

.....and, post an SOA on here in case people can advise on where you can save money or possibly claim more.

Octagon

On the off chance that you are entitled to a Help to Save account (50% bonuses paid/government scheme) but don’t have one yet, then:

1) Pay £2100 off the NatWest (although, perhaps keep one to two hundred back if you currently don’t have any emergency slush fund at all. Martin might not agree with me there!)

2) Find the best rate on an instant access saver or an interest paying current account that you can (it needs to offer outbound standing orders) Open that and shove the remaining £900 into it.

3) Open Help to Save account and set up a monthly payment for £50 (the most allowed per month) from the £900 savings account to your HTS - so it drip feeds over.

After 2 years of Help to Save you get 50% bonus paid to your nominated account. You would therefore have a further £450 (at month 24) on top off the £900 to pay off your credit cards (at month 18)

{Extra option if affordable: At the month 18 point you might want to leave the £900 in HTS, try to find a balance transfer for the CC, and keep saving into the HTS (should your income increase enough to allow that + CC repayments by then). The HTS account runs for 4 years. Bonuses paid at month 24 and month 48.}

_This sort of thing is not usually a sound plan, but due to the high % bonuses on HTS and the lower/no interest credit cards, it works out nicely_

Octagon

https://www.gov.uk/get-help-savings-low-income/eligibility

Link for Help to Save eligibility criteria.

Octagon

Ps - you might need to make sure NatWest will deduct off of the interest bearing portion of the balance as the first priority.

I think there was legislation/FCA whatnot to say they have to do that these days… Anyone know?