AIBU to want to clear credit cards with savings even if they're 0%?

[OrcinusOrca]

DH is on the same page as me but part of me feels like we shouldn't pay off credit cards with savings because the cards are 0%. Savings interest rate is so small and given the amount in savings it feels almost pointless to keep them for the interest rate.

Balance wise, imagine it's 10k in savings and 4k on 0% cards. AIBU to want to clear the 4k and reduce savings to 6k just for the psychological benefit of knowing we have no debt besides mortgage/student loan?

I know we are lucky to have any savings. I still wear mascara for two days running without taking it off which stems from my frugal student days. I just bought two t shirts in a Black Friday deal for £40 and I feel guilty. I would like to feel less guilt about spending and I think having nothing on credit cards might ease that slightly. AIBU to want to clear the cards?

There will be plenty that tell you to leave it on the CCs, like you I prefer knowing my only debt is my mortgage, especially as I'm about to start mat leave and my income will drop considerably for the next year. If savings were high interest is think more about it, but they're not, so pay it off and feel more comfortable. You'll still have access to interest free credit if you need/want it

I would clear the CC. I hate being in debt. It makes me anxious. My DH would disagree, and say 0% is fine, pay it off at an affordable amount each month.

I wouldn’t - but I would look around for better value savings. Some current accounts offer 5% for example.

The only reason to keep the credit card debt is the interest, and if that's not worth it then don't do it. (You might want to look at moving your savings to where they are getting interest).

You'll still have the ability to use the credit card if you suddenly need the money.

I personally would prefer the mental relief of not owing the money anymore.

I wouldn't clear it as if it is a transfer balance you will already have paid a fee so it isn't really interest free. If you have an expense in the future you may not have the savings to cover it and may no longer be able to get a zero percent credit card so could cost you a lot more.

I had 26k debt and then had a redundancy payout of 35k. I used it to pay off my debt, even though I wasn’t a home owner so it could have been a deposit. 8 months later ill health hit in a big way and I’ve been unable to work since. The relief I had knowing that I didn’t have that debt hanging over my head.
I know your’s is way smaller, and you are working etc. But you never know what will happen. Do what makes you feel most comfortable.

I would pay the credit cards off unless there’s something in the imminent future that you may need the £4 for. You’ll eventually have to pay it off, and it IS a massive relief to not have debt hanging over your head, especially if you run into unexpected financial trouble. At least your savings going forward will be all yours to do with as you please, and you won’t have to give any consideration to debt. Especially as you still live quite frugally - I can imagine the credit card debt is niggling away at your mind!

£4k*

Thanks everyone, I'm surprised a few of you also would pay it off.

We have never paid to transfer the balances, always done it on a fee free deal. We've had credit cards probably about three years now, a mish mash of wedding (protection by choosing to pay on CC, have had the money) honeymoon, housemove etc. If it was for a new kitchen and a way to pay it off interest free I think it would sit a bit better, but it's an assortment of things that have been going on for a while now.

I will have to look for better accounts, I have a 3% one if I pay in up to £400 a month but I've not managed to find decent ones that I can access that aren't current accounts, and I don't like having lots of money floating in our current account. I pay £300 a month off the cards so that could convert to savings as well.

It really is @Hannnnnnnxo ! It feels daft. We just got back from holiday and I felt physically sick when we used our debit card over there as we ran out of money, but since coming home and looking at the spreadsheets I've given myself a telling off for feeling so guilty, there is no reason to because it was a holiday and we have the money. My brain works in very silly ways sometimes...

All the more reason to pay it off then! If anything, it will give your credit rating a slight boost because you’ll stop being recorded as constantly in £X amount of debt, which may come across to lenders that you can’t afford to pay it off (even though you can!)