Getting rid of that debt in 24

itsthelittlethings

I owe £1250 on credit card and want to get rid of it. I can afford the interest but that's not really the point. I can afford to pay off around £150-200 per month so I should be able to get rid of it in about 6 months, by May 2024 or at least by November 2024. I don't have any major expenses projected for the first half of next year, just a couple of trips in the UK (both paid for on said credit card I must admit). I do have savings to cover the debt which is a relief but I don't want to spend them as spending savings is a pattern for me. Wish me luck!

I'm very torn about closing the credit card or keeping it for its intended purpose which is emergencies. I'm not even sure plumbers etc take credit cards.

joedenise

Can you get a balance transfer card to 0% to avoid paying interest?  If you also need to use it to pay for trips to the UK then a 0% spend card could also be a good idea.

After that you should start a savings account specifically for things like trips to the UK if this is a regular occurrence.

Baron_Dale

Instead of depending on the credit card for emergencies try to build an emergency fund. Aim for £1000. Keep this separate from other savings.
I have two credit cards. One joint one for food and petrol which is paid in full by DD each month. We also collect the extra nectar points. In addition I have my own credit card which I use several times a year to keep it active, but pay it off in full very quickly.

itsthelittlethings

joedenise said:

Can you get a balance transfer card to 0% to avoid paying interest?  If you also need to use it to pay for trips to the UK then a 0% spend card could also be a good idea.

After that you should start a savings account specifically for things like trips to the UK if this is a regular occurrence.

Why is a 0% spend card a good idea for trips within the UK? I thought 0% spend cards always ended at some point?

I might consider a balance transfer.

13thlegion

itsthelittlethings said:

joedenise said:

Can you get a balance transfer card to 0% to avoid paying interest?  If you also need to use it to pay for trips to the UK then a 0% spend card could also be a good idea.

After that you should start a savings account specifically for things like trips to the UK if this is a regular occurrence.

Why is a 0% spend card a good idea for trips within the UK? I thought 0% spend cards always ended at some point?

I might consider a balance transfer.

0% spend do end at some point, just like 0% balance transfer ends at some point. You just get longer to pay off something bought with that CC compared to your usual one.

I'd echo the advice to build an emergency fund. It kind of acts as a credit card to yourself plus you are right, sometimes cash is more handy with a plumber than a card.

I do applaud your attitude to avoid paying off in a lump sum with your savings, especially if you've done that before and debt has gone up again afterwards (been there and have that t-shirt!). Changing behaviour is more powerful long term.

You are saving, which is great. But are you saving enough and for the right things? What are your savings currently for? If you are saving but still putting trips on CC then something is out of balance. For my own journey, similar I can afford the payments but want rid of the debt, I looked at what I spent on trips and holidays in a year then divided that number by 12. That becomes a separate saving goal. Same with lots of other categories.

itsthelittlethings

I keep nearly buying perfume today but having a lucky escape. It's not cheap. I bought a second hand cook book that I've been wanting for a few days which was £6 and a nice top in the charity shop which was £5. I also bought one coffee. I'm keeping up with my spreadsheets. At the moment, it's all going on the "debt" one as it's the end of the month.

I don't think I really know what I'm saving for.

itsthelittlethings

Brrr. My heating has broken so that’s another bill. Luckily I have a studio flat with just one heater in the living room (the one that has broken) so it shouldn’t be too costly. I have applied for a 0% interest credit card but struggling to pass the ID checks in artificial light so I’ll redo that at the weekend.

I’ve bought a few more bits and bobs on my credit card such as a jumper and a few tops for work but other than that just food and coffee. I’m planning to open a new bank account for my food shopping and top it up every month and use my Monzo for week to week spending and just transfer that week’s money across. I feel like that will suit me and my mindset.

itsthelittlethings

I’ve been thinking about what I’m saving for. A longer post about that some time.

Baron_Dale

Perhaps if you post a SOA others may be able to offer further suggestions and ideas.

Spendless

If you can balance transfer your debt onto a 0% CC then do so. Be aware of when the 0% deal ends. Work out how much money you would have to pay each month to clear it before it reverts to a higher rate .Pay the minimum off the CC each month but put the remainder of the money to clear it into a savings account with a good interest rate. That then earns you interest. At the end of the 0% deal you have enough saved to pay the CC off and have also earned some interest.  This is what we are doing to clear our debt. 

At the same time build up an emergency fund of savings as others have said so you have the money for one life throws a curveball at you - such as broken heating.

Did you need a jumper? I bought myself one recently as I barely have any and needed a decent one. Ditto work tops - if yours were  all on their way out fair enough - if you just fancied a change ask yourself could the money be better spent elsewhere

itsthelittlethings

I will post an SOA this evening or tomorrow. Any advice would be much appreciated. My fixed costs are low so I should not be having these problems.

I have set up a food account and transferred £220 over to it. I am transferring £65/ week to another account for day to day spending. Hopefully this will be manageable although I have some wiggle room to increase this.