Taking a new approach to paying off Credit Card debt

Ebe_Scrooge

grumbler said:

OK, let's say the OP spends £500/month and the disposable income is £1000.

I think it's obvious that it's better to pay £1000 to the CC and then use it to spend £500 than to spend £500 on a debit card and then pay the remaining £500 to the CC.

ETA: even if it's £500 and £500, it's still not worse if £500 is spent instantly or better otherwise.

OK, I'll concede there's probably little in it between the two scenarios.

But to address the OPs original question, doing the "make payment to CC then put all spending on CC" won't reduce the CC debt any quicker than doing what he's already doing (which, I'm assuming, is putting day-to-day spending on debit card).  He's got to pay more to the CC than what he spends on it, that's the only way to get rid of the debt.

SusieT

Another problam that may jump up is that if you have had a balance that has not significantly reduced over time (e.g. not paid in full every month and only minimum payments made), the card company may decide to say thanks for significantly reducing the balance, we are now reducing the credit limit on the card. That could leave you with no disposable income as the card company have it. 
As others have said, pop over to the debt free wanabee board and you will get a lot of help there. 
Meanwhile you are now thinking the right way, so packed lunches for work which can be anything from sandwiches to a meal you reheat if there is a microwave, reduce the coffees out, look at what is in the cupboard/freezer and use things up. Olio and Too good to go may be in your area and you can get free or cheap food from them. 
Pay at least £1 over the minimum on your card(s) so that the credit history shows as more than minimum being paid, which could help you later on getting 0% balance transfet offers. Hith the card with the highest interest rate first, if they are all close in % you may want to clear a lower balance first to get the boost of having cleared one. 

grumbler

Ebe_Scrooge said:

grumbler said:

OK, let's say the OP spends £500/month and the disposable income is £1000.

I think it's obvious that it's better to pay £1000 to the CC and then use it to spend £500 than to spend £500 on a debit card and then pay the remaining £500 to the CC.

ETA: even if it's £500 and £500, it's still not worse if £500 is spent instantly or better otherwise.

OK, I'll concede there's probably little in it between the two scenarios.

Assuming that £500 is spent gradually, it's about 1-month interest on £750.

But to address the OPs original question, doing the "make payment to CC then put all spending on CC" won't reduce the CC debt any quicker than doing what he's already doing (which, I'm assuming, is putting day-to-day spending on debit card).  He's got to pay more to the CC than what he spends on it, that's the only way to get rid of the debt.

Every little helps - see above, but of course this on its own cannot make a significant effect unless combined with cutting spending.

MrFrugalFever

This method will certainly benefit you in terms of paying less interest, however, it will likely give you a false perception of plenty of money available thus increasing your spend. A credit card can be a very tempting and easy to spend on tool and is often why people end up in a vicious cycle of trying to pay back more and more because they’ve spent more and more (speaking from previous experience 5+ years ago).

Your approach works (I would certainly give it a go if it where me), however, it requires you to be a very disciplined person when it comes to spending on it. 

SusieT makes a good point about the CC company decreasing your limit, however, normally a good period of notice is given but remember you can’t just ‘withdraw’ money you require to pay for things and there are still some bills/goods/services that CANNOT be paid via credit card. Do you have an emergency fund?

How much debt are we talking about? Your situation is possibly more suited to the Debt Free Wannabe board (where I started out)……

sourcrates

Your strategy doesn't make sense, and still leaves you at the mercy of the bank, your credit limit can be reduced or withdrawn entirely at the banks discretion. 

If you have been carrying this persistent debt for a while, it may be time to cut up that credit card, and instead, start to live within your means.

If that strikes any chords with you, pop on over to the DFW board, and we can advise you on how to get debt free without feeding the banks profits any more than you have to.

[Deleted User]

@YorkshireLAD83 you've not said much, what are your thoughts now ?

From what i understood you're thinking you can pre-pay a sum onto it, put it into a credit status, 
 is that right ... and then spend on the card ?
Is this what you mean ?
There have been several posts, over the past couple of months, asking about this.

grumbler

Catsacor said:

From what i understood you're thinking you can pre-pay a sum onto it, put it into a credit status, 
 is that right ...

No. I think it was very clear:  

I have some credit card debt that is very persistent, and I would like to start reducing it down as much as possible...