We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Credit card debt
Options
chelseablue
Posts: 3,303 Forumite
I did put this in the credit card board but think I might be better off here.
I Currently have 3 cards:
Barclaycard: Balance £158 Credit limit £5,000
This is the card I have in my purse and use if necessary and pay in full if I do use it
Lloyds: Balance £3,428 Credit limit £4,500
0% until 2020, only got for the BT, card shredded as soon as it arrived
Sainsbury's: Balance £1,581 Credit limit £4,800
0% until 2020, only got for the BT, card shredded as soon as it arrived
The £5k credit card balance worries me more than my £224,000 outstanding mortgage, not sure why maybe because credit cards are 'bad'.
I currently overpay the mortgage by £400 a month.
Would it be better to redirect this money to Sainsbury's? Then it'll be cleared in 4 months
Was reluctant to do this as the cards are 0% and the mortgage isn't (I wish it was!)
I Currently have 3 cards:
Barclaycard: Balance £158 Credit limit £5,000
This is the card I have in my purse and use if necessary and pay in full if I do use it
Lloyds: Balance £3,428 Credit limit £4,500
0% until 2020, only got for the BT, card shredded as soon as it arrived
Sainsbury's: Balance £1,581 Credit limit £4,800
0% until 2020, only got for the BT, card shredded as soon as it arrived
The £5k credit card balance worries me more than my £224,000 outstanding mortgage, not sure why maybe because credit cards are 'bad'.
I currently overpay the mortgage by £400 a month.
Would it be better to redirect this money to Sainsbury's? Then it'll be cleared in 4 months
Was reluctant to do this as the cards are 0% and the mortgage isn't (I wish it was!)
0
Comments
-
Hi
It’s generally best to focus paying debts with the highest amount of interest first, which is the mortgage in your case. It would be good to have the credit cards cleared by 2020 though, so you don't have to try another balance transfer. You could work out how much you need to pay towards the cards to clear them before the 0% period ends, and pay anything spare as a mortgage overpayment.
James
@natdebtlineWe work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps0 -
1 - Work out how much you need to pay on each credit card so that the balance is paid off in full in the same month as the 0% deal ends. Or the month beforehand, just to be on the safe side.
2 - Chuck the rest at the mortgage.
Credit cards are only "bad" because they're an expensive way to borrow money, due to the interest charged. But if you're not paying any interest then they're not "bad". Just make sure you've paid them off before they start charging you interest!0 -
I would say continue to target the mortgage but aim to have them paid off by 2020. If they are 0% and you are not overcommitted then they can be a sensible way of managing your money if you have the correct financial discipline which you do from the sound of it.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
The 365 Day 1p Challenge 2025 #1 £667.95/£162.90
Save £12k in 2025 #1 £12000/£70000 -
By my reckoning £152.00 a month between both of those cards would have them cleared by January 2020 so you could easily do that and chuck the other £250.00 at the mortgage.0
-
Yes - it comes down to the thing of "good debt -v- bad debt" doesn't it.
I've currently got a 0% BT card on the go - took it out specifically to balance transfer a couple of large purchases to - but I have the money I'd saved for those purchases sitting aside in a savings account. I'm paying off the card currently by way of a monthly DD set up for the ORIGINAL minimum payment (in my case £28) and then random bits of "extra" cash I can earn.
The reason for setting the DD for the set amount rather than just accepting the minimum payment option was that the min payment will drop over time - meaning you're making less impact as "standard" 12 months in, than you were when you started. Leaving it at a set level means I can budget for that amount leaving my account, and my monthly payment continues to make the same impact throughout.
The extra money is via survey sites, cashback etc. So far since I took the card out in December I've paid off £200, near as, without taking ANYTHING from the money I have stashed in savings. There would be nothing to stop you seeing what you could do along these lines - every little helps, and you could certainly target the lower balance card to clear off in this way.
The other approach I would take would be to go through my budget and see where I can make savings - then that money saved I'd set aside into a savings account. You get added mental security from having some money set aside should the worst happen, you also have those savings as an emergency fund, but you can maintain the OP's to the mortgage.
Definitely get a plan in place to get both cards cleared by the end of the 0% though - never assume you will get another 0% deal unless you have absolutely no option.🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
£100k barrier broken 1/4/25SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 350.8K Banking & Borrowing
- 253K Reduce Debt & Boost Income
- 453.5K Spending & Discounts
- 243.8K Work, Benefits & Business
- 598.6K Mortgages, Homes & Bills
- 176.8K Life & Family
- 257K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards