Pay off balance or not

dingbatdave

I have enough savings to pay off my credit card bill of £1600.
I know you will say- "Pay it off", but this will leave me with little or no savings incase of emergencies!
What would you do?

System

dingbatdave wrote: »

I have enough savings to pay off my credit card bill of £1600.
I know you will say- "Pay it off", but this will leave me with little or no savings incase of emergencies!
What would you do?

What kind of interest rate are you paying?

If you are paying interest are you in a position to shift the debt to 0%?

Then you can save on interest and keep hold of your nest egg!

UNDERGROUND

Daisy_Daisy_2

I would say pay it off, then your credit card can be for emergencies and you're not paying interest

dingbatdave

Underground. I'm a 'Capital One' user and I would change but don't want another credit card as Capital one has been helpful in the past, stupidly, I probably think loyalty stands for something.... Is it getting harder to apply for credit cards or not?

dingbatdave

Daisy Daisy. As I thought, "Pay it off", seems to be the way forward, although it's nice having money in the bank. Am I stupid or what?

dingbatdave

Thank you both for your quick and sensible advice.

YorkshireBoy

dingbatdave wrote: »

Daisy Daisy. As I thought, "Pay it off", seems to be the way forward, although it's nice having money in the bank.

You're paying 4-5 times the interest rate your savings are earning in the bank!!!!

Am I stupid or what?

Not for wanting a savings buffer, but you are for not shifting the debt to a lower interest rate...even if you pay a 3% BT fee.

Well, you asked for it.

MiniMetalElf

what about paying a large chunk of it off (say £1000) and keeping the rest of your savings for emergencies. That would give you the best of both worlds. Reduced interest cost and still some savings for emergencies. Just a thought...

dhassen

well I'd pay it off, (unless it's O% on the cc) and as someone else says you've then got the CC for emergencies. Then you can start saving with nothing to owe anyone, and soon you won't need the cc for emergencies either.