I never know what debt to focus on...

nolastchance

Hi, I'm looking for some advice, I've some surplus money money coming in every month and I'm unsure of which debt to put it towards and was looking some guidance.
I owe a 0% interest credit card 1650, a loan (that i can make extra payments too) £2,900 - think the interest rate is about 3 or 4% and my mortgage is £190k (interest rate 2.89% for another two years).
I have £200 surplus, would you split it between the 3 or focus on the loan?
thanks in advance.

geordiejon

how long do you have the 0% for with the credit card.

nolastchance

geordiejon said:

how long do you have the 0% for with the credit card.

Until December but was hoping to apply for another and pop the balance over. I don't use the card it was just used for a large ticket item to make it easier to pay off. 

geordiejon

i assume you are paying the required ammount on all these debts and have the £200 spare each month.
i would set up an account somewhere that pays monthly interest (chase do this on the 1st of each month and pay 3.3%)
then in december see how much extra you have saved and take it off the credit card, you can then transfer any remaining balance to a new card.
this way if anything unexpected happens you have a little put aside for it.
i maybe wrong and others may suggest something different but thats my view.

boingy

To me the loan seems the most obvious choice, but you need to tell us the exact interest rate on it to be sure!

PloughmansLunch

I would focus on putting money aside for the credit card over the next 6 months, because if you have difficulty getting a BT offer at the time then chances are the APR will shoot up to 18%+. As mentioned above, Chase is a decent option for your surplus - you can have the direct debit for the card minimum payment coming out of a savings pot which will also be earning you interest, then pay off a chunk in December.

nolastchance

boingy said:

To me the loan seems the most obvious choice, but you need to tell us the exact interest rate on it to be sure!

Oh my goodness Boingy, I have just checked the loan interest rate and its 12.68% APR - Definitely a no brainer it would seem. I honestly thought it was lower!

geordiejon

nolastchance said:

boingy said:

To me the loan seems the most obvious choice, but you need to tell us the exact interest rate on it to be sure!

Oh my goodness Boingy, I have just checked the loan interest rate and its 12.68% APR - Definitely a no brainer it would seem. I honestly thought it was lower!

in that case yes loan is 1st to lose.

geordiejon

can i ask, do you just pay the minimum on your credit card.

nolastchance

geordiejon said:

can i ask, do you just pay the minimum on your credit card.

no, i usually pay a couple of hundred a month on that

geordiejon

thanks for the answer.
maybe as you are looking to transfer the credit card in december try to do it now.
if you transfer or not just pay the minimum amount on the card for now and use the rest to overpay your loan.