Should I withdraw my ISA

stinking_dylan

I've just hit a predicament.

My car (Frontera) has just died. The fuel pump has gone and it'll cost more than the vehicle is worth to fix it, plus I still have another £2,900 left to pay on it (held on an interest free card). And, don't have any immediate savings.

I also have £8000 in an ISA which was being used to pay my mortgage.

Now, the ISA dropped in the last six months, so may need moving to a different plan anyway considering the current market.

Options are:
a: Try to get a new interest free card or take out a loan to buy another car. Whilst still paying for my old car.

b: I could withdraw the ISA. Use the cash to pay off the current car loan and buy another car. Then change my mortgage to a repayment plan. My mortage is only £38,000.

Any suggestions? I'm leaning more and more on withdrawing the ISA, but still don't know if it's such a good idea...

tallyhoh

Interest free card is a good idea. If you get a loan you would have to compare the interest rate with your ISA. I doubt it would be less than your ISA is paying.
Have you paid this years ISA allowance in?

stinking_dylan

I haven't paid this years allowance in. I currently invest £78/month.

The problem with the interest free card option, is I need to find a card which will take at least £8,000 (£5,000+ for replacement car and £2,900 transfer of previous car balance).

A 'low interest rate for life of balance transfer' card may be good, but I already have the m&s card. I used it to pay off my ex-partners £7,000 gambling debts.

Not sure I'm keen on the idea of having £15,000 on credit cards.

tallyhoh

Dont have a problem with the CC's if you have the money to back them up, which it sounds you do.
I use a credit card for all my shopping (I get points off the card & points from the supermarket). I know that if it all goes pear-shaped I have my ISA to fall back on in an emergency.
Better to use a 0% credit card sensibly than use your savings.

LilacPixie

To be honest i would probably look at getting your current car fixed. 5k+ on something that will just depreciate again and may break. Maybe get a few quotes on fixing the frontera. it may cost 1k to fix and only be 'worth' £800 but if it then runs for 1-2 years no problems it have been a better way than transfering 8k to a cc.

rayday2

I was watching working lunch a couple of months ago and they recommended people keeping savings at the moment with the uncertain credit future.

They were advising this because if the credit crunch worsens and more companies struggle then they may start reducing credit limits on cards, and refusing more loans etc so hence keep saving as long as possible. So that if you ever need money for an emergency its there rather than applying for another card or loan say and being turned down.

I am not implying bad credit - that was the whole point of the article the problem could be more about lenders confidence than peoples credit histories.

stinking_dylan

The frontera has cost me a fortune. This is the second time it's broken down this year and I've been hit by a hefty repair bill. Plus the tax increase over the next two years is going to hit hard, and it's heavy on fuel.

A mechanic friend who used to own a frontera himself and had the same problem, said the same. he got rid of it because it was too expensive to repair.

Looking at a honda civic hybrid. Very low tax and running costs.

stinking_dylan

Also, cars I'm looking at are private sales because their cheaper, but can't use a credit card, unless they allow me to make a cash withdrawal.

bank_of_slate

stinking_dylan wrote: »

can't use a credit card, unless they allow me to make a cash withdrawal.

:eek: :eek: :eek: :eek: :eek: NO!!!!!!!

...Linda xx

stinking_dylan

Exactly =\

Also, my ISA is a prudential investment ISA, and is starting to loose money. Maybe this needs to be moved to a cash ISA like icesave?

bank_of_slate

Have a look at Martin's latest saving tips!
We went for the Hisave 7% account.
...Linda xx