Which balance do I pay?

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sparky40
sparky40 Posts: 251 Forumite
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in Credit cards
Hi all,

Just looking a little guidance. I'm wondering which balance I am best to pay off.

I have one card with about £4k on it which I pay the min due each month which is normally around £85 and a 0% card with £1600 which I pay £75 off each month.

I have approx £500 that I wish to pay off one of the cards, am I best to pay it off the 0% or the other one on which I pay interest.

I think the 0% one but the OH says the higher balance one to bring it down.

Thoughts please!

Thanks in advance
:j Norn Iron Club Member No. 343 :j

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  • eskbanker
    eskbanker Posts: 31,388 Forumite
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    edited 15 November 2018 at 1:51PM
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    OH is right, pay it off the one incurring interest....

    Edit: you might also wish to consider lowering your monthly payments to the 0% card down to the minimum and increasing the payments to the interest-incurring card by the same amount, as this will reduce interest costs.
  • onlyfoolsandparking
    onlyfoolsandparking Posts: 1,779 Forumite
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    eskbanker wrote: »
    OH is right, pay it off the one incurring interest....

    Edit: you might also wish to consider lowering your monthly payments to the 0% card down to the minimum and increasing the payments to the interest-incurring card by the same amount, as this will reduce interest costs.


    100% agree, its a bit of a no-brainer if you think about it
  • Craig1981
    Craig1981 Posts: 769 Forumite
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    agreed with the above - £25 minimum (check your T&C on the 0% card about minimum, or statement when produced), and chuck the rest on the interest bearing one... the lumpsum to the interest bearing one as well :)
  • plunt
    plunt Posts: 525 Forumite
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    completely agree, set the 0% card to the minimum repayment and piles all excess into the fee paying one, ensuring you have enough to atleast still may the minimum on both card in future months. Which is you are in doubt may mean holding off using the full £500.

    The only other thing to consider is when does the 0% end? If its soon, what rate does it revert to? You could also look to potentially open another 0% 0 fee balance transfer card to reduce the interest bearing balance further.
  • sparky40
    sparky40 Posts: 251 Forumite
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    Thanks folks.

    Wish I hadnt bothered. Did the transfer yesterday to the card with most interest and Halifax kindly lost my money. TSB still havent received it so Halifax have to put a trace on it which can take 5 weeks.

    😭😭😭😭😭😭😭😭

    P.s didnt tell OH he was right!!!! 😂😂
    :j Norn Iron Club Member No. 343 :j
  • eskbanker
    eskbanker Posts: 31,388 Forumite
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    sparky40 wrote: »
    Wish I hadnt bothered. Did the transfer yesterday to the card with most interest and Halifax kindly lost my money. TSB still havent received it so Halifax have to put a trace on it which can take 5 weeks.
    Bank transfers don't always pay off credit cards immediately, there's often a lag before the relevant payment is actually applied to the card account to reduce the balance, so it's not necessarily a problem if you only made the transfer yesterday. What do the Ts & Cs of your credit card say about timescales to apply payments?
  • sparky40
    sparky40 Posts: 251 Forumite
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    eskbanker wrote: »
    Bank transfers don't always pay off credit cards immediately, there's often a lag before the relevant payment is actually applied to the card account to reduce the balance, so it's not necessarily a problem if you only made the transfer yesterday. What do the Ts & Cs of your credit card say about timescales to apply payments?

    TSB said they should have it by now. 🙄 they said it should take no more than 24 hours which it now is.
    :j Norn Iron Club Member No. 343 :j
  • eskbanker
    eskbanker Posts: 31,388 Forumite
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    sparky40 wrote: »
    TSB said they should have it by now. 🙄 they said it should take no more than 24 hours which it now is.
    Getting funds from a Halifax current account through to a TSB credit card will involve a number of steps though, some of which will be outside the receiving bank's control.

    Halifax (as with any other bank) will sometimes hold outbound transactions on their way out of their system for security checks, rather than pushing them straight through, and, even in the Faster Payments world, there's no guarantee that inter-bank transfers will go through any quicker than end of next business day (which hasn't been reached yet).

    My point was more about what happens at the TSB end though, whereby even once they do have the money, it may not be applied to a credit card account instantaneously, as this process is different from simply paying into a current account.

    I'd be amazed if this took anywhere near five weeks to resolve and would strongly suspect that all will be OK tomorrow!
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