Tempted to pay off a card!

chelseablue
chelseablue Posts: 3,301 Forumite
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in Debt-free wannabe
Currently have 2 credit cards:

Lloyds, £3,843
Virgin, £10,555 (moved 2 interest paying cards and loan onto this)

Both cards are 0%

We have £9,000 in savings and I'm tempted to use some and pay off Lloyds (and close it)

I keep going round in circles about what to do, would be great to have less debt but am worried I'd never get 9k in savings again or would take years to build back up!

Also planning to use some of the savings in December as we're going on holiday to Australia

What would you do?
«13

Comments

  • fatrab
    fatrab Posts: 1,231 Forumite
    If both cards are at 0% I'd do nothing, except maybe put the £9k somewhere that will gain a tiny amount of interest.


    Once the 0% deals are ending make sure you've enough to pay them off.


    Just don't fritter the money away!! :)
    You can have results or excuses, but not both.
    Challenge - be 14 Stone BY XMAS!

  • chelseablue
    chelseablue Posts: 3,301 Forumite
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    Thank you

    The Lloyds card is made up of 2 different end dates:

    £2,163 expires 3 October 2019
    £1,680 expires 3 February 2020

    Virgin is 0% until January 2021
  • fatrab
    fatrab Posts: 1,231 Forumite
    How much do you save per month? Could you set yourself a challenge to save the £2k by Oct 19? £200/month?


    Or set the Lloyds DD at £200/month to clear the balance on time for the 0% deals ending?
    You can have results or excuses, but not both.
    Challenge - be 14 Stone BY XMAS!

  • chelseablue
    chelseablue Posts: 3,301 Forumite
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    Yes I could set the direct debit to £200, that would mean in 12 months the balance would be £1,443.

    So I would then have 4 months to clear the remaining balance before the 0% ends in Feb 2020?
  • fatrab
    fatrab Posts: 1,231 Forumite
    Yeah, if you're aiming to completely clear Lloyds without touching your savings you'd be looking at about £225/month (assuming you pay/payed £225 this month).


    That would leave you a year to tackle as much of the Virgin card as possible, I'm guessing you'll be looking at doing another balance transfer in Jan 2021?
    You can have results or excuses, but not both.
    Challenge - be 14 Stone BY XMAS!

  • chelseablue
    chelseablue Posts: 3,301 Forumite
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    fatrab wrote: »
    Yeah, if you're aiming to completely clear Lloyds without touching your savings you'd be looking at about £225/month (assuming you pay/payed £225 this month).


    That would leave you a year to tackle as much of the Virgin card as possible, I'm guessing you'll be looking at doing another balance transfer in Jan 2021?

    I make it £240 a month to clear it by Feb 2020? Although I may be doing something wrong :rotfl:

    While I'm paying that do I just leave the Virgin card DD at the minimum?
    Then in Feb 2020 when Lloyds is done the Virgin balance will be around £8,900 still
  • Nick_C
    Nick_C Posts: 7,456 Forumite
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    fatrab wrote: »
    If both cards are at 0% I'd do nothing, except maybe put the £9k somewhere that will gain a tiny amount of interest.

    I would put the £9000 somewhere where it would earn a reasonable amount of interest.

    2 * £3000 in Tesco Current Accounts @3%, 1 * £1500 in TSB @ 5%, £800 in a Club Lloyds Monthly Saver @3% (£400 now, £400 on 1 November), and £700 in a Club Lloyds account at 1.5%.

    Average interest 3.2% or £24 a month.

    Keep using the regular saver to save for the holiday.
  • fatrab
    fatrab Posts: 1,231 Forumite
    chelseablue wrote: »
    I make it £240 a month to clear it by Feb 2020? Although I may be doing something wrong :rotfl:

    While I'm paying that do I just leave the Virgin card DD at the minimum?
    Then in Feb 2020 when Lloyds is done the Virgin balance will be around £8,900 still
    Yes I would pay minimum (or just slightly more) until you've cleared the Lloyds card, then throw everything at Virgin.


    £3843 / 17 months (including this month) = £226.06


    Then you could have nearly £3k paid off Virgin before you need to look at another balance transfer in 2021, or at that point use your £9k (+ interest) savings to completely clear it.
    You can have results or excuses, but not both.
    Challenge - be 14 Stone BY XMAS!

  • chelseablue
    chelseablue Posts: 3,301 Forumite
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    Also, husband gets his bonus in February which is £1,500 (take home) and I get mine (also £1,500 take home) in March

    So could have Lloyds cleared in March
  • theoretica
    theoretica Posts: 12,293 Forumite
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    Depends on how you think about the savings - this money is entirely offset by debt so it isn't really a net positive. If you are likely to look at it and spend more because you have 'savings' than you would if you just had the net debt of about £5.5k then paying off the debt would probably save you money.
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
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