Credit Card debt v Savings

RAS

Dunree said:

Thank you very much Brie

I've just paid the £2k towards the card.

I'm lucky in that it's the only debt I have. 

May even do a BT when I get the time to have a closer look at what's on offer..

There's a balance transfer tool in the latest newsletter. If you can sort that out, you could put part of the saving on your current monthly payment towards savings.

What I would point out however is that there are savings and there are budgeting accounts, and even if you don't have the former, you probably need the latter.

There are loads of annual costs for which you need to budget monthly. Christmas, birthdays, holidays, insurance renewals, MOTs, boiler service all come round once a year and if you haven't budgeted for them, it's likely they will end up on a credit card. If you are paying them monthly, there's often a premium.

How much did you spend on all those items last year? Divide by 12 and put that into a budgeting account. That way you can cover the annual costs without paying a premium or putting it on a card. If you are paying an insurance monthly, you can now pay it as a lump sum and save quite a bit. You may not get them all onto annual payment the first year, but should aim for it.

Dunree

Hi folks,

Thank you very much for the advice. It is genuinely appreciated 😊

As I said I paid the £2k straight onto the card. 

Once I’d done I thought I should’ve kept some back but, by then, it had already been paid. 

My DD is set at £100 p/m regardless of what the bill is and I usually pay a bit extra through the month so I never pay the minimum amount. 

I have four other cards which I very rarely use and they are there for emergencies only. 

We are very fortunate that we have no mortgage or rent to pay and have a reasonable pension so we live comfortably but by no means extravagant. 

When I get a minute I’ll look at doing a BT onto one of the other cards so that should save on the interest. 

Once again, thank you very much for your help 😊