WWYD savings Vs paying CC

[Rainbowhairdontcare]

If you had a choice between overpaying your credit card (currently at 0%) and saving money? What would you do? I don't think we can beat case scenario we could be credit card debt free within a year.

Pay the debt first

pay off debt then save
you could always save a fiver a week to startoff

Debt first,

Clear the debt, keep the credit available on the card until you’ve saved a decent emergency fund then cancel the card.

Then focus on longer term savings.

Good question! I am in the same position. I will have paid off cc within the 0% period based on current standing order but a pay rise means I have more left to either pay off cc or put into savings. At present I am thinking of a compromise position and splitting the extra money 50/50 between overpaying cc and building savings

Debt, always pay off debt. It's a no-brainer.

I would always pay off the credit card. Even if it's 0% you'll end up using your saving to pay for it eventually anyway so it doesn't really make much difference.

Exactly Bean the only benefit that I see of having the savings is that they'd be there in case we needed that money for some unexpected expenditure.

If you save the money you'll make a little bit of interest, but it's probably only tens of pounds. I would do that because all those little gains do add up.

I'd probably buy a new Mac...

In one month I made the wonderful amount of £1! So no, gaining interest is definitely not a reason!

I saved.
My minimum payment was something like £38, I paid £100. Still, at the end of the 0%period, I had another £2300 to go. I rounded it up to £2000 outstanding.
Then I transferred the balance onto a new 0%.
I just paid it all off this september. And my savings are intact. I use regular savings accounts that give me 5% interest on my savings though.

Had I not been able to get another 0%, I would have used my savings.
HTH

Thank you Pebbles we're looking into that as a possible option.

We currently have no cash savings (everything Is going into purchasing the house) and would like to build some cushion again.

rainbow, I ‘pretended’ I paid the full whack. Say you owe £1200 and the minimum payment is £38. To clear it on time you’d have to pay £120 a month. Instead, I paid £60 on the card and £60 in savings iyswim. Come the end of the term, I would have paid £600 straight to the credit card and £600 in savings. If it works, put the remaining £600 on another 0%, if it doesn’t, at least you would have saved enough to clear.
Hope it makes sense.

How much can you afford to save and how much are your monthly repayments? A lot of people never learn how to save because they are always in debt and fail to ‘see the point’ of it - but the truth is if you focus on savings and treat it like any other bill you will end up with a larger nest egg over 5-10 years even if you have to take a large proportion out to repay your card debt

I'm usually a pay your debt girl, but in this case, I think I'd save. So long as you wont 'spend'the savings because they are there, leaving yourself without the money to pay off the cc?

Usually, the best this g to do is save up an emergency fund and then repay your debt. If you don't do this its very common to increase the debt you have because you have no savings when something goes wrong. When we had a similar issue we did both, always keeping an eye on when the 0% ended and the chances of getting another similar deal.

Exactly, my fear is that we clear everything we'll just end up with more debt. (Or one will replace the other).

It's hard but I feel permanently anxious without savings, and anxiety can make me spend money.

Because 0% is presumably only on the balance transfer I'd save, then any unexpected costs can be covered from savings, not on credit with an interest rate. Save to clear the card debt at the end of term. Ideally save extra to cover unexpected costs. Usual advice is to have 3 months income as savings.