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I want to clear my credit card debt or should I save money instead

(25 Posts)
2015mom Thu 10-Nov-16 10:58:00

Hi I have two credit cards which are interest free for a long time... I think one will charge interest in 2018 and the other end of 2017

I am going to go on maternity leave so don't know whether to just try and save what I can from my income or just clear credit cards

Reviewing saving money on bills by using less electricity and light and other stuff but not much I can cut money ob

chipsandpeas Thu 10-Nov-16 11:13:11

depends on how much you can save or pay off every month
personally id save the majority of what you can, they are interest free but pay the minimum and a little bit more so you are still chipping away at them
then if needed when the interest free period is up you can get another card on interest free and transfer the balance or use what you have saved to pay a chunk off

abbsismyhero Thu 10-Nov-16 11:16:35

Pay more than the minimum payment it cuts it down fast

Notreallyhappy Thu 10-Nov-16 14:59:34

If your still in work for a few months if pay down the cards then save. If your on less £££s on ML, how do you plan to pay then. What if you run out of money & the 0% deal runs out. You'd be up toyour knees in interest.
I'd divide the 2017 0% by the months it's got to run & pay it every month & the 2018 0% pay double minimum at least until the '17 is ended then pay 2018 off.

2015mom Sun 13-Nov-16 07:50:46

Thanks guys

I was initially waiting for money I lent my brother to pay it off .. But still waiting so suppose I should just chip away at the credit card debt myself really

maggiethemagpie Mon 14-Nov-16 19:19:16

I always see credit cards as negative savings, so I suppose it doesn't really matter whether you build up savings or pay off cards as your net savings will be savings minus credit card debt.

I know psychologically it can feel good to have a bit tucked away though.

ememem84 Thu 24-Nov-16 09:16:26

I would start chilling away at the debt. Minimum payment then a bit more.

specialsubject Thu 24-Nov-16 10:12:51

Savings earn negative interest now - real inflation is over 2% and rising. (Insurance tax went up another 2% yesterday and we all need insurance). That said, you do need a financial cushion.

Hammer away at those debts - forget tatmas gifts, no new clothes ,no waste.

ivykaty44 Sat 03-Dec-16 16:50:32

If you have interest free credit cards then you would be better opening up a drip feed account to earn 5% interest on the amount. Then in 2018 pay if the credit card

PassiveAgressiveQueen Sat 03-Dec-16 17:01:37

Where can you get 5% interest on small savings?

bimbobaggins Sat 03-Dec-16 17:58:15

i would always try to pay debt before having savings and when your debt is clear you will be able to save the money from the payments you usually make to that

tribpot Sat 03-Dec-16 18:09:09

Why has your brother not paid you back? It sounds like this isn't really youru debt, if what he owes you will cover it.

ivykaty44 Sat 03-Dec-16 21:24:55

M&S but you need to swap your current account to them, they do it all for you. Plus give you £100 of vouchers and £10 per month every month you put in £1000, so you can get £220 in total.

There is first direct doing similar as are TSB

Nationwide paying 5% on under £5000

ivykaty44 Sat 03-Dec-16 21:28:26

Bimbogbam
I would normal agree but not if the debt is interest free and the savings are paying interest at 5%

You could make £90 in interest on £250 a month over one year

If your debt is £3000

You would save the money each month, pay it off after a year and walk away with £90

If you o the M&S bank swap and drip feed account you would make £310 in a year

leccybill Sat 03-Dec-16 21:34:40

What kind of savings account pays 5%?

I have a cash ISA which this month gave me the grand total of 6p interest. There's £7500 in there angry

ivykaty44 Sat 03-Dec-16 21:51:15

Leccybill - I've posted above about three that do. I got fed up with USA paying nothing so git myself a M&S account this year to just then be able to get their savings account for drip feeding £250 a month, that way I get £90 also I put in £1000 every month and then into another account. I have had £180 of vouchers so far. another £40 to come.

I also set up anither similar account with nationwide and drip feed a savings account for approx anither £100 of interest

JugglingMum17 Fri 28-Apr-17 22:20:50

Thank you everybody for your comments they are very helpful.

I may just chip away and pay one credit card and transfer the other one to another balance transfer.

My brother has not paid me back at present my sis in law has not been working this year she has been doing a post grad. She has got a job sept so hopefully I will see my money soon

ChessieFL Sat 29-Apr-17 03:54:49

HDBC also has a savings account paying 5% if you have a current account with them.

ChessieFL Sat 29-Apr-17 03:55:00

HSBC!!

seoulsurvivor Sat 29-Apr-17 03:56:05

Always pay off debt before saving.

Normally I'd say clear debt, but I would save the money while it's interest free and then pay off when you need to

fuzzywuzzy Sat 29-Apr-17 05:32:31

Clear the debt before the interest starts kicking in.

Topnotes Sat 29-Apr-17 06:24:17

Save the money to pay off the debt when the free interest period ends. If you are up for a bit of risk, try a share ISA (where you choose the shares to put your money in) or put it in a share fund ISA (where a fund manager does this for you - try Hargreaves Landsdowne). You can make a lot more than 5%, but also at risk at going down as well as up of course. Love my share ISA!

maggiethemagpie Mon 01-May-17 18:33:36

No reason why you can't do both... I know people will say to pay off the card but if it's at 0% then I can see why you may want to build up some savings, it can feel good psychologically to have some savings.

I have a direct debit to my credit card and my savings each month.

TinselTwins Wed 31-May-17 22:02:28

What kind of savings account pays 5%?

I get 5% with nationwide (but only for 6 months)

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