Have some cash - need debt advice

dchurch24

Hi,

I have recently cashed my endowment policy, which has given me a total of just over £2500.

I have 2 credit cards and my wife has 1.

I need to know which is the best way to use the money to clear the debts.

Breakdown of debts.

Egg - £3000
Barclaycard - £506
Sainsbury's - £1000

I was thinking of paying the Barclaycard off in full, paying £2000 off of the Egg card then balance trasfering for the life-of-balance offer on the Barclaycard half of the remaining Egg debt.

Is this sound reasoning? Or is there a better way? Will I be paying interest on the whole £3000 on the egg card all the time there is any outstanding debt?

I have just applied for a Virgin 0% balance transfer but was turned down - my credit is shot to bits due to a legal rangle with Abbey National regarding my overdraft (£1500 - now cleared :-).

Any help would be hugely appreciated.

jonimitchell

Would you be able to put what the interest rates are of those debts? It would make sense to pay off the highest first.

jonimitchell

F3K3R wrote:

may i suggest you try here http://fortyeight.net/lh.php?lXc=4338

Very unhelpful and misleading!!!

dchurch24

User duly reported.

dchurch24

egg - 15.9% - Limit - £3500 - O/S - £3000
bc - 18.9% - Limit - £500 - O/S - £500
sainsbury - Limit -15.9% - £1700 - O/S - £1000

mountainofdebt

I agree with you ...pay off Barclaycard, partly pay off egg and then trasnfer the remaining balance of egg to a LTOB to Barclays.

However what's your limit with Barclays? The only reason I ask is that you can transfer up to 90% of your limit so if you have sufficient left I would also transfer some of the Sainsbury balance as well.

With regards to your credit rating - can't you put notes on your file to explain the wrangle with Abbey?

dchurch24

Barclaycard limit is only £500 I'm afraid, so the most I can move is £450.

We are hoping to ebay a lot of stuff off now - our 2 daughters are growing fast and so we have lots of 'baby stuff' that we will no longer be using, so we are going to use that money to clear as much as we can.
This was up to 25k at one point, so we've done quite well so far (pats self on the back).
The thing that troubles me is the fact that I'll be paying interest on the 3k for a card that will have about 500 on it.
I wish I'd never heard of credit cards.

As regards to the credit file, I'm not sure it would do me many favours as it was me that started the court proceedings against them - who would want a potential troublemaker as their customer?

tomstickland

Well done in shrinking your debt down to this level. Get moving with the Ebay for definite. People will buy virtually anything as long as you honestly describe the condition and post it out promptly. I sell quite a lot of stuff and the key seems to be putting low starting prices on so that it attracts attention. I mean really low, like 30p and then things will find their true value. Also for postage of heavier items check https://www.parcel2go.com (£10 to post up to 25KG) and for bulky items check https://www.interparcel.com (cheaper than Parcel2go for +10Kg and >1m length).

mountainofdebt

I've just had a look at one of my (many!!) credit card statements and it states

"because interest is charged on a daily basis, the amount of interest payable will increase the longer payment is delayed even if payment is made before the due date"

What this is saying is that the earlier you make the payment the less interest you'll be charged. Therefore if you make the balance trasnfer before your statement date then you will be doing yourself a favour.

I can't see egg being any different.

Be careful though of making an extra payment where the normal payment is due within say 10 working days. The DD for the normal payment will be taken as normal and could cause you to go overdrawn ....there are several posts on the credit card board moaning about this!

The other thing that I would recommend is that once the payment has cleared for anything you sell on ebay (and always make sure it does before sending the goods!) I would make a payment of that amount less what it has cost you to send it & your fees into your credit card account.

By doing this, you won't get tempted to use the money on something else and the interest you will have to pay on your credit card will be less for the reason outlined above!