Defer DFW for Asda Xmas bonus

lazer-zxr · 7 November 2016 at 9:34AM

Hi all,
I feel I'm in good control of my budgets, and now at £45k of £53k paid back.

In November, I'm due to over pay approx £2k.

However ...............

I am tempted to skip November's overpayment, and put £2k on Asda savings cards, to get the 4% bonus (£80) within the month, and resume full DFW busting activities in December.

We shop at Asda, and will use this £2k balance up over next 8 months.

My remaining debt is at 3.8% per anum.

I think this makes financial sense.

I just need some reassurance I'm not missing something here.

MrsTinks · 7 November 2016 at 10:18AM

Firstly you will need to have topped up by the 13th of November, so if your bonus is paid after this then I would forget about it.

Also - 3.8%apr on £2000 - how long will it take you to pay off the £2000 on your debt if you pay as you currently do?

My gut feel is to say it's a bad idea - I would lump pay it off as I don't think £80 is worth it... I do appreciate that's a personal view.
If other family had asked you to buy stuff for them at Asda and given you the cash then absolutely! But using it to "stooze" money at that return I'd say no...

That's mainly my personal view though

lazer-zxr · 7 November 2016 at 10:34AM

Thanks for your response. I appreciate your feedback. I guess it all depends on how much value you attribute to £80

MrsTinks wrote: »

Firstly you will need to have topped up by the 13th of November, so if your bonus is paid after this then I would forget about it.

The 4% bonus is paid on the Asda card on the 14th November.

MrsTinks wrote: »

Also - 3.8%apr on £2000 - how long will it take you to pay off the £2000 on your debt if you pay as you currently do?

I'm overpaying £2k per month. This will be cleared in December.

EssexHebridean · 7 November 2016 at 10:42AM

Some practicalities, but do bear in mind I have no idea how these savings cards work.

- What is the "security" on these cards - ie is it money that is held in an online account and so is covered by banking regulations (ie just a "card" in name)
- Assuming that the above does not apply, what happens if someone breaks into your home and steals them - does your home insurance cover that sort of thing,m or would it deem them as "cash" and refuse to pay out on that sum?
- bear in mind that having money sitting there "waiting to be spent" may reduce the incentive to keep grocery bills down. It also ties you rigidly to shopping at Asda of course - which may not always be what you want to do.

Does your bank have a linked savings account or even a regular saver with a good interest rate that you could deposit your 2k into instead if you wanted? Nationwide for example does a regular saver linked to the Flex accounts which pays 5% - you'd simply have to deposit over 4 months as the limit on that account is £500 p/month.

I'm with Mrs Tinks - 2k is a hell of a percentage of your outstanding debt - and frankly I don't feel the difference between 4%, and 3.8%, is enough to justify this one, bearing in mind the potential issues above. Does it *actually* save/make you money, or would you do better hammering down the debt to get the interest you're paying reduced?

EssexHebridean · 7 November 2016 at 10:43AM

lazer-zxr wrote: »

Thanks for your response. I appreciate your feedback. I guess it all depends on how much value you attribute to £80

No - it all depends on whether the maths *actually* work, and whether the practicalities add up.

*edit to add*

You're OP'ing 2k per month, so your debt will be gone, on that basis, in 3.5 months? You've been sticking at it this long, I'd keep the momentum going if it were me. In this world none of us can be entirely certain what will happen, down the line - I'd go for safety, get that debt gone and put yourself in a position of security, if it were me.

MrsTinks · 7 November 2016 at 11:07AM

EH is right - it depends on if the maths add up really

And practicalities - I would personally stick with the over payment, but it's totally a personal matter on that for me... £80 might be worth it to you, but to me I would want it off the debt ASAP

And yes if I had a card with £2k on it for Asda my resistance to something I might not have intended to spend normally would be low... "Well there is like £1800 left on the card... Why not spoil myself with lobster/champagne/etc (I'm being cheeky) - it's not REALLY costing me money..." - if you think you have the ability to not fall into that trap then good on you

lazer-zxr · 7 November 2016 at 11:22AM

Thanks for everyone's feedback.
The maths works for me, when considering 3.8% over a year, 5% savings over the year or 4% in one day (I wouldn't get £4 on £100 in one day).
However ....... I have been convinced by your comments of keeping the debt payback momentum going, and even more so by the .... "it's free money" attitude. I think these are very good arguments, and are enough to put me off this idea now.

So thanks for your input, helping me consider more arguments than I initially had. £2k will come off the debt this month

I will buy one of these gift cards though for £144 and get a free £6, to cover the shopping for the next 2 weeks or so ... to feel like I am getting a little something for knowing this little bonus scheme exists ... that works for me

MrsTinks · 7 November 2016 at 11:55AM

lazer-zxr wrote: »

Thanks for everyone's feedback.
The maths works for me, when considering 3.8% over a year, 5% savings over the year or 4% in one day (I wouldn't get £4 on £100 in one day).
However ....... I have been convinced by your comments of keeping the debt payback momentum going, and even more so by the .... "it's free money" attitude. I think these are very good arguments, and are enough to put me off this idea now.

So thanks for your input, helping me consider more arguments than I initially had. £2k will come off the debt this month

I will buy one of these gift cards though for £144 and get a free £6, to cover the shopping for the next 2 weeks or so ... to feel like I am getting a little something for knowing this little bonus scheme exists ... that works for me

That would make far more sense to me

And if you think you'll spend more than £144 for christmas in Asda then nothing wrong with loading the cards a little more to get more cashback. Don't forget all the supermarkets do similar schemes if you shop in a variety of stores...

I'm ALL for money for nothing - just that I know myself and if it's there then I have the breaking point of a kitkat

(mmmmm kitkat)

EssexHebridean · 7 November 2016 at 12:23PM

lazer-zxr wrote: »

Thanks for everyone's feedback.
The maths works for me, when considering 3.8% over a year, 5% savings over the year or 4% in one day (I wouldn't get £4 on £100 in one day).
However ....... I have been convinced by your comments of keeping the debt payback momentum going, and even more so by the .... "it's free money" attitude. I think these are very good arguments, and are enough to put me off this idea now.

So thanks for your input, helping me consider more arguments than I initially had. £2k will come off the debt this month

I will buy one of these gift cards though for £144 and get a free £6, to cover the shopping for the next 2 weeks or so ... to feel like I am getting a little something for knowing this little bonus scheme exists ... that works for me

That sounds like a great compromise. Keeps the momentum going, keeps the money safe, but also helps give you a boost and a feeling that you can "play the system" a little.

Defer DFW for Asda Xmas bonus

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