pay off cards or save?

blondeemma82

I owe around £5000 on credit card and this is on an interest free period till nov. I am intending in Nov to change it to a different interest free card and am paying about £10o a month off the balance.

I am also trying to save up (also around £100 a month) as i think i am less likley in the future to spend on credit if i have some savings.

My question is should i be concentrrating on paying off credit first or is saving a good option??????

CannyJock

blondeemma82 wrote: »

I owe around £5000 on credit card and this is on an interest free period till nov. I am intending in Nov to change it to a different interest free card and am paying about £10o a month off the balance.

I am also trying to save up (also around £100 a month) as i think i am less likley in the future to spend on credit if i have some savings.

My question is should i be concentrrating on paying off credit first or is saving a good option??????

If it's 0% till November then you should pay the minimum and put all your available cash into a high interest instant-access savings account to earn you interest. Set it up with monthly interest - it's a good motivator to save when you can actually see the interest being added each month. I'd recommend the B&B esaver issue 2 or the Kaupthing Edge online account, paying 6.4% and 6.5% respectively.

Don't fall foul of missing a payment or forgetting to clear/switch it before the 0% period runs out

blondeemma82

Thanks for the advice. I think i am doing the right thing, just wanted to get someone else's opinion to double check!!!!

YorkshireBoy

You're still going to owe well over £4K in November if you only make the minimum payments until then.

I suppose, therefore, it boils down to discipline in saving the spare money each month, because if you can't get a sufficiently large enough credit limit in November, or worse, if you're declined because of your current indebtedness/circumstances at the time, then those savings will come in handy.

kosma1

definitely save some money, and earn the interest. if you have 0% interest on your card, you gain more from high interest savings.

i am in a similar situation, but keep my savings in an isa while i try to pay a little more than the minimum, just so i know i am doing my bit to reduce cards.

good luck in reducing your debts