Continue to 100% pay off debts?

romneym335

For the last 6 months I've been working loads of overtime in order to pay stuff off. I've managed to pay off the remainder of a loan (12k) 2 years early. I now have a 10k credit card left. I estimate this would take me 6-7 months to pay off using all of my left over money after bills etc each month. I have next to no savings at present due to commiting all of my money to paying off debts. 

What's people's thoughts? Pay off the credit card with everything left over or save a bit and use the remainder to pay off the credit card which would obviously take longer.  At present the credit card is interest free till April and I will then try to transfer the balance. 

ukindexinvestor

Pay the minimums on the debts until you have a little bit of savings, then you can focus on paying them off. try message them to see if they can give you a couple months of interest free or no payments to get back on your feet

HampshireH

Depending on what you actually have to pay it off (£700/800 a month?) Split it. Keep overpaying but also build up savings.

Perhaps have 1 month of saving only then strike a balance.  Once happy with your savings go back to throwing it all at the credit card. You're not guaranteed a new 0% in April and if you do it may not be for the whole balance so you don't want to rely on that.

You are so close to clearing it

EssexHebridean

You’re bound to get many different viewpoints on this, and ultimately can only take the one that feels like it fits you the best. Personally I would be throwing everything I could at the card until April, to make a new deal - or, for that balance, dealS - more likely to be achievable, and I would then be dividing out the remaining balance once new 0% deals were found by the number of months in the deal to work out what needed paying from that point. 

Once you reach that point, you have two options:
at this point in time, my favoured one would be to set the card to a level a little above the minimum payable each month - so for example, for a £207 min payment, I’d set to a £210 DD - and then setting the balance of the month amount off into a higher interest savings account ready to clear the remaining balance the month before the 0% finishes. That way you earn a little interest while also being sure that the monthly payments aren’t missed, and you get the advantage of a set monthly DD having more impact on the balance than a straight “minimum payment” - this method also helps with budgeting too. 

You also have the option of simply paying the relevant proportion of the balance to the card each month - useful if you either don’t trust yourself with the savings quite yet, or if you are concerned that something will come along which would need you to dip in to this money. 

If taking the set monthly DD route, you must not use the card at all (usually advisable with 0% BT cards anyway) and also be vigilant around any changes of terms which mean that the monthly payable might increase. 

TheAble

There's no guarantee you'll be able to shift the debt in April, and these balance transfer cards are becoming harder to get hold of or so I understand, probably because credit conditions have tightened. Your idea of building some savings certainly has merit but I'd be inclined to just get it paid off as quickly as possibly and then start building savings afterwards.

MFWannabe

romneym335 said:

For the last 6 months I've been working loads of overtime in order to pay stuff off. I've managed to pay off the remainder of a loan (12k) 2 years early. I now have a 10k credit card left. I estimate this would take me 6-7 months to pay off using all of my left over money after bills etc each month. I have next to no savings at present due to commiting all of my money to paying off debts. 

What's people's thoughts? Pay off the credit card with everything left over or save a bit and use the remainder to pay off the credit card which would obviously take longer.  At present the credit card is interest free till April and I will then try to transfer the balance. 

How much money is left over each month? 
If it will take you 6-7 months to pay off 10k then approx £1,400 per month? 

Personally I would put £1000 out of first month into a savings account so you have some money to fall back on if anything goes wrong/ need replacing then I would throw everything at the credit card from them on. 

Before your 0% ends in April try to get another 0% deal, then work out how much you need to pay off each month to clear it in the 0% period. Then put the remainder into savings and build up your emergency fund 

Martico

I'd be tempted to apply for a 0% BT card now - you're very unlikely to get one that covers the whole 10,000, and that would ensure some certainty. If approved, it would mean that you can immediately transfer, say, 2,000 - whatever the new limit - onto a 0% card. And then come April you may have a chance of getting another BT card while you carry on paying the thing down.

NeverendingDMP

It all depends on what emergency might affect you. Do you rent, own a home, have a car that if it breaks down you could catch a bus instead or do you work shifts/work far/rural location  that means the car needs to be fixed immediately. If anything like that applies put a bit aside then you can be relaxed in knowing you can throw money at the debts. Or work out the extra you plan to pay to debts eg 600 a month and pay it in quarters ove four weeks. That way you have some money available apart from that last week of the month then if an emergency happens you know you almost have new funds available to fix it. Good luck with it all. You have done really well so far!

Veteransaver

Make sure you pay off the higher interest rate debt first, in general.

backinbusiness

Offt - I'm a half and half-er if I can't decide.  That might make the ability to then get a 0% balance transfer card a little bit easier too.  Good luck OP.  You've done so well so far.  BiB x 

romneym335

I was going to lump everything at it for the next 6 months or so, around 1500 per month and struggle on with no savings but I'm being convinced to do half and half now or at least until hopefully I get a new 0% and pay the minimum off I need to over 18 months to clear it. Thanks all