Financial advise please

chris_h

chris_h

chris_h

Associate
Joined
12 May 2014
Posts
173
Hello all

I am looking for your opinions as I am struggling with my financial situation as I don't know what the best solution is.

Ok so to start I am not short on money, I just don't know what to do with it. I have a credit card with a debt of 1500 quid, by this point I expected it to be about 500 quid but expenses got in the way. This debt is interest free until next month, and I am tempted to get a balance transfer.

By the time I do that it will be car insurance renewal time and another 700 quid on top.

I just got a new job paying a generous amount, I can clear the credit card debt in 3 months if home repairs didn't get in the way.

I can't decided wether to use my savings and clear it all, or, use my salary and a balance transfer and clear it over the next 6 months.

Cheers

Edit; I also very tempted to put a nice holiday down on the card...
 
well just look at the interest you get form your savings vs interest/fee you'd have to pay for a balance transfer - which option is cheaper?
 
Clearing debt is always the answer. Seeing £0 outstanding balance on my CC is such a good feeling. Would recommend to all.
 
I know what I'd do in the circumstances, but I'm not sure that giving financial advice like this should be treated in the same way as medical advice on these forums, it'd be a shame given all the useful threads but I could see it leading to problems.

Anyway in brief, it depends I suppose on how serviceable your debt is, what interest you're getting on your savings, if you can afford to pay off the credit card and then buy the car insurance next month, and your own personal approach to debt. Don't forget you're going to see balance transfer fees.

I'm going to assume that you don't have massive savings from a few things you've mentioned, and that you're not gaining much interest, disregard if this isn't true.

If you can afford too, I would pay off the debt. You can factor in though things like what if the car insurance is £800 and not £700? What if you do have home repairs in the next 3 months? It doesn't sound like you have much of a "rainy day" fund, so how would you pay those? If you absolutely had too, you could put these on the card/a new card/loan and then worry about the interest again further down the line if you absolutely had too.

Credit card debt isn't a terrible thing, if you can manage it properly. But at present, unless you're very lucky you're stuck in the same savings morass as most of us, and you're getting nothing, or next to nothing, on the money you've got banked.

Clear the debt.
 
Last edited:
Credit cards are sneaky buggers and must be disposed of as soon as possible.

Even a balance transfer would be subject to a fee so you may aswell clear it with the money you have.

If you really did fancy sticking a holiday on another credit card then apply for a new interest free one. Don't balance transfer at a cost if you don't have to.
 
So you've got £1500 on a credit card (ok at nil interest rate) but yet you have £40k in savings.......

Just pay if off for christ sake..........

Pay for your holiday from your low interest savings and be done with the credit card.

Is this even worth a thread??
 
I would personally pay off the credit card from savings, close that card and then get a new interest free one/cashback one.

From the general looks of things, you are reasonable enough with money so, if you are responsible enough, why not take advantage of the offers knowing you won't be stung by the penalties.

Then again, I mostly use my credit card for the protection it offers and the cashback. Pay it off every month and not worry about it.
 
Wow.

Credit cards are not inherantly a problem, just be careful with the application.

But as far as debt and savings are concerned, you should look to maximise your net gain (or minimise you loss) by paying down any debt that charges a higher rate than the NET rate on your income.

So a 0% credit card should only be paid down just before the normal charging resumes, because even a 0.1% savings account is improving your position.

Currently the order to eliminate should be roughly:
1) Pay day loan
2) credit card charging a fee (if charging almost certain to be 7%+++)
3) mortgage
4) save into highest net savings, maxing as applicable before dropping to next

3 and 4 are slightly tricky since they can be reversed or partly reversed for individuals depending on exact situation, tracker/fixed etc, and you may have limited savings opportunity to get a better return than the cost of borrowing on the mortgage
 
Seriously OP, why did you make this thread? £1500 on a credit card is no big deal, even for someone on a fairly low wage. For someone with £40k savings it's a joke.

If you cannot handle this in your own head, you need to take a long hard look at yourself in the mirror and work out why it is you've the decision making capacity of a child.

I'm also amazed you've saved £40k on a £15k income. Are you sure you've got your numbers right and it's not £4k savings and £15,000 credit card debt? I could understand someone needing advice then.
 
MooMoo444 said:
Have 40k in savings and getting concerned over a 1500 debt. Is this a joke topic or did you misplace a 0 somewhere?
Click to expand...

Haha! Was thinking the same!

Just pay off the £1500.

Using a credit cards 0% for purchases is fine, we usually buy something big and then setup a payment plan each month to pay it off...then again if I had £40k in the bank I wouldn't be writing a post like this :D
 
You must log in or register to reply here.
Back
Top Bottom