Continue to 100% pay off debts?

TheAble

Superhoop91 said:

Martico said:

Here's a factsheet from National Debtline on persistent debt

I'm well aware what persistent debt is. Are you aware that minimums these days are above interest charges, therefore if you don't spend on the account, you will end up clearing the balance? 

This is true. However it's still possible to repay more in interest than capital over the prescribed time periods even if making minimums. For example a minimum payment of £400 may comprise £250 of interest and £150 of capital. Depends on interest rate and lender.

Superhoopza

TheAble said:

Superhoop91 said:

Martico said:

Here's a factsheet from National Debtline on persistent debt

I'm well aware what persistent debt is. Are you aware that minimums these days are above interest charges, therefore if you don't spend on the account, you will end up clearing the balance? 

This is true. However it's still possible to repay more in interest than capital over the prescribed time periods even if making minimums. For example a minimum payment of £400 may comprise £250 of interest and £150 of capital. Depends on interest rate and lender.

Yes good point. Most lenders are set up now to pay more of your capital then interest but not all as you say. 

Would this then flag up on your credit report as persistent debt or anything other than just your balance amount and payment history? The reason for asking is because I've currently switched to only making minimums on most of my accounts so I can put any spare cash towards the highest interest accounts first, but would this have a detrimental effect in the form of other 'flags', amongst everything else on my account.

Martico

Take a look through the factsheet - it explains the processes and timings of any warnings

Superhoopza

I think we've got to the point we're both making. You're saying persistent debt can have negative impacts on credit ratings and I'm saying paying minimums doesn't always mean persistent debt as sometimes minimums can be 3x the interest amounts (or more), sometimes less too.

Important to always give a balanced point when offering advice.

scourses

Save 1-2k- for emergency. Pay off card as quick as possible. You have done well so far keep going. 

EssexHebridean

Superhoopza said:

Martico said:

Here's a factsheet from National Debtline on persistent debt

I'm well aware what persistent debt is. Are you aware that minimums these days are above interest charges, therefore if you don't spend on the account, you will end up clearing the balance? 

Most people who post on here are keen to get debt free as soon as they can though, so finding small ways of making the process more efficient can really make an impact. 

Superhoopza

EssexHebridean said:

Superhoopza said:

Martico said:

Here's a factsheet from National Debtline on persistent debt

I'm well aware what persistent debt is. Are you aware that minimums these days are above interest charges, therefore if you don't spend on the account, you will end up clearing the balance? 

Most people who post on here are keen to get debt free as soon as they can though, so finding small ways of making the process more efficient can really make an impact. 

Is the suggestion that I am not trying to assist with that?

Rob5342

How much is next to no savings? The danger is that an emergency comes up.ajd you.domy have the money to cover it. I'd put some money into an emergency fund and clear the debt in 8-9 months rather than 6-7?

EssexHebridean

Superhoopza said:

EssexHebridean said:

Superhoopza said:

Martico said:

Here's a factsheet from National Debtline on persistent debt

I'm well aware what persistent debt is. Are you aware that minimums these days are above interest charges, therefore if you don't spend on the account, you will end up clearing the balance? 

Most people who post on here are keen to get debt free as soon as they can though, so finding small ways of making the process more efficient can really make an impact. 

Is the suggestion that I am not trying to assist with that?

No - you asked a question, I answered it with an explanation. Simple as that. 

EssexHebridean

Superhoopza said:

EssexHebridean said:

Superhoopza said:

Martico said:

Here's a factsheet from National Debtline on persistent debt

I'm well aware what persistent debt is. Are you aware that minimums these days are above interest charges, therefore if you don't spend on the account, you will end up clearing the balance? 

Most people who post on here are keen to get debt free as soon as they can though, so finding small ways of making the process more efficient can really make an impact. 

Is the suggestion that I am not trying to assist with that?

No - you asked a question, I answered it with an explanation. Simple as that. 

Rob5342 said:

How much is next to no savings? The danger is that an emergency comes up.ajd you.domy have the money to cover it. I'd put some money into an emergency fund and clear the debt in 8-9 months rather than 6-7?

An EF is a must - otherwise you end up in a loop where as soon as "something" happens, the solution is to use credit to sort it - where use of credit has become a problem, the best approach is almost always to stop using it (aside from things like mortgages) entirely until the problem is sorted, and then to re-learn to use it in a way where it works for you - section 75 for purchases where the money is already saved and ready, cashback but with cards cleared in full, that sort of thing. That, combined with budgeting is the building blocks for a healthy financial future and should mean that you don't find yourself back in a similar situation in the future. This is a general rule of thumb rather than one which specifically applies to the OP.