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0% Balance transfer and add to ISA
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stevenfayers
Posts: 5 Forumite
So, I've got 8k on a credit card at 0%. I could either:
a) pay off the 8k or
b) balance transfer to another card for a 2% fee for 20 months (I think works out at about 1.3% APR) and then use the 8k in an ISA earning ~5%.
My parents would say pay off the debt before saving (and I can hear Martin saying it too), but to me it would seem more logical to earn 5% and pay 1.3%?
Thoughts?
a) pay off the 8k or
b) balance transfer to another card for a 2% fee for 20 months (I think works out at about 1.3% APR) and then use the 8k in an ISA earning ~5%.
My parents would say pay off the debt before saving (and I can hear Martin saying it too), but to me it would seem more logical to earn 5% and pay 1.3%?
Thoughts?
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Comments
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Do you have the funds to carry on paying the min amount till balance is due on 0% card?
Life in the slow lane0 -
So, are you saying you have the £8k in cash available to pay off the card just now? Otherwise I'm confused how you are paying £8k into an ISA.0
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If you can BT the whole £8k and have the money to pay the minimum every month + know you will never need the £8k for emergency use, then it makes sense
If the 8k might be used for an emergency etc then it's not worth the riskSam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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