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Pay off credit card or save

(17 Posts)
ballsdeep Tue 11-Aug-20 21:21:20

My husband may be made redundant . He has a £3000 credit card which we are able to throw £600 a month at to clear it. He wants to save it on case he is made redundant but I think it's best to clear all debts so we only have our mortgage and car loan (which has a year left on it). Which do you think is best? Pay or save?

OP’s posts: |
Elsiebear90 Tue 11-Aug-20 21:23:20

What is the interest on it? Can you do a balance transfer to a 0% interest card and that way it’s not costing you any money? If not then definitely pay off the debt first imo.

Indecisivelurcher Tue 11-Aug-20 21:24:18

I think probably save. So you've got flexibility to spend the money on whatever you need. Move the debt to 0% interest and depending on how real the risk is, just do min payments to maximise saving. If he keeps his job you can then use the savings to clear the debt. I think this is what I'd do anyway!

optimisticpessimist01 Tue 11-Aug-20 21:25:49

Is your credit card interest free? And if so for how long? I'd always prioritise debt over savings but it really depends on the interest, if its interest free for at least a year then go for the savings, if its not then it needs to be paid off

ballsdeep Tue 11-Aug-20 21:27:02

It's 0% atm but we want to move house (obviously job pending ) but I think if we pay it off then we'll be in a better position if he needs to get a new job.

OP’s posts: |
optimisticpessimist01 Tue 11-Aug-20 21:27:03

For most people when it comes to personal finance you should always pay off your debts before you save. What's the point in saving £3,000 when you have £3,000 debt to pay off anyway?

ballsdeep Tue 11-Aug-20 21:28:03

optimisticpessimist01

For most people when it comes to personal finance you should always pay off your debts before you save. What's the point in saving £3,000 when you have £3,000 debt to pay off anyway?

This is what I think! Just pay it off and of we need to dip into credit then we can do so.

OP’s posts: |
optimisticpessimist01 Tue 11-Aug-20 21:28:26

Just seen you want to move house, definitely pay off the credit card. Unpaid credit card debt (even at 0%) will go against the amount you can borrow from the bank

namechangenumber204 Tue 11-Aug-20 21:28:43

Savings are paying almost no interest so if you put money in there and continue to pay interest on your CC debt you are losing money. So pay off debt first.

OnlyFoolsnMothers Tue 11-Aug-20 21:29:17

I’d say save tbh- I need a cushion

ballsdeep Tue 11-Aug-20 21:30:57

Thank you. Hopefully it won't get to that and he will keep his job but thanks for helping x

OP’s posts: |
NoSquirrels Tue 11-Aug-20 21:31:01

If you can balance transfer now to a 0% credit card, do that and save everything above the minimum payment.

If you need the money you’ve saved because he’s made redundant, then it gives you that option. And if you don’t need it, you can pay off the card in full at the end of term 0% period.

It’s a trap to pay off debt aggressively if you don’t have any cushion of cash for unexpected expenses.

NoSquirrels Tue 11-Aug-20 21:32:48

It's 0% atm but we want to move house (obviously job pending ) but I think if we pay it off then we'll be in a better position if he needs to get a new job.

If you’re moving house imminently it makes sense.

If you’re not, keep it at 0% until the job situation is clearer.

DillonPanthersTexas Tue 11-Aug-20 21:33:41

If its a standard variable rate credit card then absolutely pay it off first. You are not saving while paying interest on a card that will no doubt dwarf any interest offered by your bank on your savings account.

Iminaglasscaseofemotion Tue 11-Aug-20 21:33:59

Well if you pay it off and he ends up being made redundant, you can always use the credit card for things you need if you're struggling.

Iminaglasscaseofemotion Tue 11-Aug-20 21:37:46

In saying that, I always save cash instead of throwing loads of money at my credit cards. I like to have can to fall back on.

icebearforpresident Tue 11-Aug-20 22:56:47

I was just made redundant a few weeks ago and used my payout to get rid of my debt. I wish I had been able to put it into savings but now I’m not paying out hundreds every month for credit card payments I can afford to save ( I was fortunate enough to to have a job lined up by the time I was made redundant, albeit only part time).

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