What should I pay off?

Jenna

Hello you lovely people,

How is everyone this Saturday? As you can tell I'm having a wild night here on the sofa, working out my budget!

Just thought I would make a thread as I'm getting myself rather confused about what's best for me to pay off next. I currently have £296.73 in my savings acc which I can use to pay off my debts ... the main 2 are CC's:

CC # 1: £1,666.97 @ 0% til the start of May 08
CC # 2: £212.74 @ 16.9%

CC # 2 happens to be Egg, who (in their infinite wisdom) have decided I am a credit risk (since I always pay on time, which is of course a terribly risky thing!) and will cancel my account in 35 days. Fair enough, they are allowed to do that if they so choose (it's in the T&C's), but it leaves me with a dilemma.

I was planning on paying off the Egg card now (because it was costing me interest) and then saving up towards a deposit (we are moving in the next couple of months to another rented place and need to save up a new deposit).

The deposit is 6 weeks rent (plus you need to pay a month's rent in advance) so this is quite a hefty sum. So I thought (since we expect to get almost all the deposit back from this flat) as well as saving up, just before we move in, I could draw out £500 cash from my Egg Money card. I could then put it into the new deposit, and when we get the old deposit back, just pay off the full balance again with that. Yes I would pay a few weeks interest cost, which is annoying, but only amounts to about £7.

This would leave me free to make a new credit application to BT my CC # 1 across to another 0% deal and carry on reducing the balance after we have moved into the new place.

I'm feeling a bit lost now and Egg have really annoyed me :mad: . I don't desperately want to take out new credit just to tide me over for a few weeks til we get the old deposit back. We will be able to save 80 - 85% of the funds needed if we tighten our belts but yeah. Having a safety net would have been nice, just in case!

Do I try for the new BT card now, then a second card in a few months for the short-term deposit funding? Withdraw money from the Egg card now up til the limit and use this towards the deposit, and just pay them interest for the next 2 - 3 months til I can clear it off again?

I am angry at Egg for what appears to be a very arbitrary decision, as the card is a flexible and useful product for me (especially the Money Manager). I phoned (I was polite, I should add) and the woman was rude and indifferent. I would very much like to pay it off and then take my business elsewhere. But ... I don't want to cut off my nose to spite my face, as it were.

Am confuzzled ... any help would be much appreciated! Sorry in advance if the post is rambly, I'm still in shock from getting this letter from Egg! Would like to see Martin's take on the situation ... thnx guys ...

taxi73

I wouldn't let them have another penny interest and would pay them off now and try to raise the extra by other means

NewbieMoneySaver**

I'm no expert on this but i'm sure everyone will tell you to go for the Egg one first.

The fact that you are paying interest on the card and 0% on the other speaks for itself.

Go on pay it off and get on with your life without them. You can then concerntrate on the other card.

Good luck.:j

CLAPTON

although they are closing the eggmoney a/c they aren't insisting you pay it off immediately.... you only need to continue making the minimum payments.

so I would keep your savings for your deposit
let the egg card just tick over
If you don't already have a MBNA CC then apply for a new 0% BT card deal as they will allow BT from your current a/c so you can raise cash for your deposit , pay off the egg and even transfer the cc#1.