Paying off credit cards.

[gregssausageroll]

We have 4 credit cards which we want to pay off. We admit we've overspent but had to move back to the UK and start again last year so some of the expenditure has been necessary

One credit card which we pay interest on has quite a large balance with the others having various much smaller balances but are currently interest free.

I know this is a silly question but I take we are better paying off the big one first, ie the one we pay interest on? Or should we clear the interest free ones to reduce the overall number of cards we hold?

I was shitting myself but I have spent a few hours this morning going through everything which I have not done in a while. I felt sick doing it but feel better knowing where we are at and what needs to be done.

I would suggest moving balances from the one you pay interest on to one of the ones that is interest free.. you will then be actually paying off more debt rather than interest on the debt. If you can't do this then I would pay off the one you are paying interest on first as the others are not "growing" - but make sure you pay minimum payments.

I've done the same thing - better to know where you are at and make a plan IMO.

Are your payments done by direct debit? you could arrange to pay off the minimum amount or a fixed amount and then "top up" any money you have spare at the end of the month - this is what I do.

Good luck!

Never thought about transferring some balances. Good idea. Will have a look at that.

We pay the minimum every month by direct debit (I'd forget otherwise) and make additional payments when we can but I plan to be stricter on this now that I fully know where we are at financially.

I have been putting additional cash to the interest free ones which is silly as I should be concentrating on the interest one that costs us more.

Thank you!

If you can transfer a balance to a 0% card there's usually a fee attached for doing so... make sure you check that out before going ahead. But, as a rule, it's always better to pay off the debt that is attracting the biggest interest rate first - because that's the one that's costing you the most money.

Good info here
www.moneysavingexpert.com/cards/?tab=1

but the best way to do it without getting new cards - pay max you can on the one with highest interest first - when that is paid off then go the next highest interest etc