Reducing my credit card debt- options

DanielDeronda

After several years recently on benefits, I'd built up a credit card debt of around £11k, all on 0% credit cards, with deals between 12 & 18 months 0% interest.  I'm paying off the minimum amount each month.

I started a new job in February, giving me a disposable income many times my UC payments.  I'm building up a rainy day fund, but want to reduce & eventually clear my credit card debt.  I want to keep building my savings, but just wanted some advice on how much would you put towards the credit card debt, I have around £1200pm available after bills & food.  I want to make sure I have a buffer to cover me for any unforeseen expenses or if, fingers crossed it doesn't happen, that I lose my job in the future.

SusieT

A few ways to do what you want, I would either round up the payments to the nearest £10 above minimum on all the cared so that your credit report shows as more than minimum payments. Then I would set the minimum on the first 0% to expire as the amount needed to clear it before interest starts, and then roll that into the next 0% finishing date. Alternatively set all the payments to the cards at an amount that will clear them by the time interest would start which may be £800 a month depending on the values of each card, the remainder would go to savings. Without the actual amounts outstanding and end dates it is hard to say what would be the best way.
Well done for tackling it soon after getting a job and fpr saving 

Martico

DanielDeronda said:

After several years recently on benefits, I'd built up a credit card debt of around £11k, all on 0% credit cards, with deals between 12 & 18 months 0% interest.  I'm paying off the minimum amount each month.

I started a new job in February, giving me a disposable income many times my UC payments.  I'm building up a rainy day fund, but want to reduce & eventually clear my credit card debt.  I want to keep building my savings, but just wanted some advice on how much would you put towards the credit card debt, I have around £1200pm available after bills & food.  I want to make sure I have a buffer to cover me for any unforeseen expenses or if, fingers crossed it doesn't happen, that I lose my job in the future.

It looks like you have enough spare each month to clear all of the debt within nine to ten months if you were to use all of your spare cash on paying off the CCs. Assuming you can be disciplined, there doesn't seem to be a reason (as they're on 0% for at least 12 more months) not to build up your buffer now. When the time comes that interest starts to be charged, that buffer would be enough to clear the cards completely. 

I would build an interest-paying savings buffer of around three months spend first, and then focus on the cards. I'd also throw some extra money above minimum payments to the cards, so that you can see them reducing. That's always a good feeling. I'd focus those excess payments on the card with the shortest remaining 0% term. 

Good luck! And well done on the new job

enthusiasticsaver

Well done for tackling this but I would be paying more than minimum towards the debt if you have £1200 spare. I appreciate it is 0% but I would pay around £500 of the £1200 towards the debt and split the rest between savings and lifestyle. 

Vinknut

Work out how much you need to pay each month to clear the debt before it starts attracting interest, and then pay that amount.