Which Debt First?

TrixMix666 · 19 July 2019 at 11:47AM

Hey,

So I made a thread a few weeks back asking for some basic advice, since then I’ve had a PPI claim come through totalling £1200 (had totally forgot I had done this tbh) but it should clear into my account next week. Obviously the “adult” choice for these funds is to clear my existing debts which I’ve recently grown concerned of (even if the other side of me would much rather have a shopping spree!!).

I currently have two accounts:-

Capital One - £1220 / £1500 - 30.9%
Aqua - £1715 / £3450 - 34.9%

What would be the best way to use this money against my debts? Do I split it and pay some towards each bringing both down, do I pay the higher % card to get it down lower or do I clear the total balance on the lower % card?

Thanks in advance

Candyapple · 19 July 2019 at 12:31PM

I would normally say pay off the highest interest bearing debt first (Aqua), however in this case given their interest rates are not too far off each other, I would say clear the Capital One debt entirely and then close the account. Reason being, sometimes the satisfaction of reducing the number of debts you have can be more mentally beneficial than the saving of a few quid.