Which to pay off first

doracookie

I have 3 credit cards with different lenders and swapped the balances round so they are now all on 0% for 9,12 and 18 months. The 9 month 0% has £1400 on with a credit limit of £4000

The 12 month 0% has £2100 on with a credit limit of £5200

The 18 month 0% has £3000 on with a credit limit of £3500

I’ve had a promotion in work and worked it out that I can afford £600. Out of that £600 I have currently set up to pay off £100 per month off each card, but, would it be better to pay the other £300 each month off the card with the most on due to my utilisation rate on that one card being so high or pay off the 9 month 0% card?

thanks 

GrumpyDil

I would use the extra money to pay down the 9 month card first, then the 12, then the 18.

JGB1955

£600 finds the 9 month card paid off at Month 3 (with £400 left over to pay towards the 12 month card).

Card 2 would be paid off in full by Month 6 (with £100 left over).

Card 3 would be paid off in full by Month 11.

13thlegion

Feels to me like a perfect case for a snowball approach. As @JGB1955 has said, once the smallest balance has gone you will have the £100 + the £300 you have been putting on that to go towards the next card.

Do you have an emergency fund (meaning money saved but not planned for anything) so you don't have to use any credit cards? And are you regularly putting money aside for infrequent but predictable spends? Such as Xmas, car maintenance etc. If not I would advise doing that first before paying extra on the cards. Again to avoid you needing to use credit cards for them.

FrugaiMacDugal

Agree with above comments, when you clear a card cut it up, when all cards are clear you'll have £600 a month to put into savings, earning interest.

Jemma01

How much is it after those 0% are over?

Do you trust yourself to build your savings with the 300/m and leave the money alone to grow in a savings account and then pay it off when due? I fear that people who take on debt (esp 3 cc's at the same time) choose to spend more than they can afford.

Only you know if you have strong financial management, so I'd say pay the 300/m towards the 9, then the 12, then the 18.

doracookie

https://forums.moneysavingexpert.com/discussion/comment/81872729#Comment_81872729

I split up with my ex and he had controlled the money so sadly had to use my cc to survive at the time. So now things have settled I can sort my finances I hate being in debt and never normally in debt before this the cards are for emergency rainy days I’ll be getting rid of at least one of these asap.

doracookie

no I don’t at the moment I used to have savings but I split with my ex and had to use my cards to survive at the time. I just want this debt gone so I can save money again and financially be in a much better position.

doracookie

https://forums.moneysavingexpert.com/discussion/comment/81873127#Comment_81873127

sorry this is for @13thlegion

Bluebell1000

Although snowballing is a good option, I think if I was doing that I'd prefer to split the payments so that the 0% cards will all be paid off on time, but given they're interest free, not worry about trying to pay them early.

So that would be £156 a month for the 9 month card, £175 for the 12 month card, and £167 on the 18 month card. That gives you £100 or so per month to add to an emergency fund, and then a bit extra in the emergency fund once the first card finishes, and so on.

FrugaiMacDugal

https://forums.moneysavingexpert.com/discussion/comment/81873127#Comment_81873127

You sound a very positive person, clear off the cards, then build up a wee savings chest, when happy with that, have a holiday in the sun, lie back and soak up the sun, and say to yourself 'wow I'm free'.

Good luck, be happy.