Save it, pay off extra on my Credit Card or split it between the two..................

[fannyannie]

that is the question.

I've decided on the months that I don't pay the TV licence (we pay quarterly) I'm going to put the money aside (I include it in every months budget even though it's not used) so that's £40 (I know it's slightly less but I always call it £40 for arguments sake).

We're also making a £30 a month saving with Virgin after I called and told them we weret hinking of changing to Sky because we were paying so much (actually wouldn't go back to Sky if you paid me but it worked LOL). And this month DH is giving me £20 back that I put into his brothers account in Zim for him.

So at the end of this month I'm going to have £90 'extra' and end of most other months I'll have £70 - I've already put £30 into my 'spare' bank account this month (taking the balance to £32 ) and am trying to decide how to split the money.

The Credit Card balance is quite high (about £850) (some 'nessecity spending at the start of last year when we were still getting back on our feet - and then stuff for the Zim holiday last year) - but the interest pretty low - and we don't use it now - it's just there for real emergencies. I'm currently paying £30 a month (£13 more than the minimum payment) on it.

So at the end of this month (and others when the 'spare' cash is there) do I

1. Split the extra equally between 'saving' account and my credit card
2. Put all of it into my 'saving' account (it's not really a savings account just 'spare cash really LOL) so there's cash if we do need it.
3. Put all of the extra onto my Credit Card to get it paid off quicker???

You will "save" the most money by paying your credit card off quickly.

Rough example you are charged 20% interest on what you owe on a credit card and probably get what 5% interest on what you save.

Once you've paid off your credit card but savings you have against an overpayment reserve on your mortgage, if you have a mortgage & are allowed to do this. You should be able to get the money back when you need it and in the meantime it reduces the interest you are paying on your mortgage.

I would pay off the card as you are paying interest on it. Can you not transfer the balance to an interest free card?

good point bubblerock - even better then stick the money into savings/against mortgage so when interest free deal is finished you can pay it off in full!

Yes DEFINITELY pay off card first, unless it's on a 0% interest offer.

pay off the card

won't get another Credit Card - rating not good enough. Mortgage in DH's name.

The one thing that makes me want to split the two amounts is that we're going to be on a reduced income for the next 9 months (as I'm on Mat Leave) which means the money that really is "left over" at the end of each month won't be there.

I'm thinking if I put some aside into my spare account at least there's going to be emergency cash for if we need it. Whereas if I put it all into my credit card repayments and we really need something or a suddenly expense comes up we'll end up using the Credit Card and owing just as much again.

Pay off debt , the interest charge on that will be greater than any income on svaings.

oh - and I should perhaps add that my Credit Card isn't the only debt we're paying off - also paying of DH's credit card (which we don't actually have anymore), and several other large debts from 1 1/2yrs ago. We have NO savings whatsoever..

need a lot more info on all the debts etc to work out what is best in If you are married than the mortgage debt & house are still jointly owned by both of you. Are the other debts fixed, or still accruing interest etc?

Put the money towards whichever debt has the highest interest. It's easier to concentrate on one debt at a time.

Take a look at This and others on the forum, it's good to see other people in the same situation (or worse) and it does spur you on!

no - mortgage has no bearing on me whatsoever - that's how I ended up getting the Credit Card at the beginning of last year - yet even the high interest ripoff loan people wouldn't look at DH because of the mortgage arrears. Infact I was really suprised by the (relatively low considering my low income and no credit history) interest rate I got when I applied for the CC - MUCH better than anything DH had been offered in the past.

DH is paying off car HP, large (£15k) loan, mortgage arrears and flexi-loan.

my income goes towards paying off his CC (fixed repayment amounts which were agreed when we got into difficulties but which we don't actually have anymore), my credit card - which is still usable and a finance agreement from the business (which we'll pay off the last payment of £60 at the start of September) (oh and I pay for most of the household bills too - apart from mortgage).

bubble - the one with the highest interest is DH's credit card..........but since we can't use it and it's set monthly repayments (which are about £150 less than they would be if we didn't have the agreement with them) we're loathe to pay more on it each month - and I really would like to have spare cash available for emergencies (as things stand at the moment we'll be debt free - apart from the mortgage in 3 1/2yrs time) - which when you consider the fact that we came within a whisker of being declared bankrupt and losing the house 18 months ago is pretty good going IMO.

That is great going, I remember the worrying threads last year so you're managing really well!

oo you know I've just realised I'll actually have £130 a month from October (excluding the 4 months of the year when the TV licence is payed) because I'd forgotten (until I wrote my last post) that one of the debts will be cleared at the start of September !

thanks bubble - I keep having to stop and look sometimes when I do my weekly shopping and it comes to £60......and I pay without blinking......or when I walk past our brand new washing machine which we paid for in cash 2 months ago and then pinch myself to see if it was all just a horrible nightmare when I had £15 a week to spend on groceries and at the end of each month we played Eeny, meeny, miny, moe as to which bills we'd pay that month and which would leave us alone for a bit if we didn't pay them.

Anyhow - this isn't getting my housework done - shall come back and see peoples thoughts on it later................(she says prizing her pg ar*e off the chair LOL)

From what you said your DH credit card is now fixed etc so it's monthly interest is irrelevant. Well done on sorting out all the other stuff just keep going slowly but surely. Are the mortage arrears fixed too?

Alvin Hall always said that you should pay off any debts, then start saving.

So pay it to the credit card co.

If you have an emergency, use the credit card. But you might not have an emergency, in which case you will have paid it off, and no more worries.

Pay card off first. Always clear debt you're paying interest on first.

right decision made - I'll pay most of it towards my Credit Card - but I'll still put a little bit (maybe £20 or so) into my other account so if something does crop up (like DH's family desperately needing some money or car needs fixing we won't have to use the credit card - but I'll still be paying more off on that so it'll go down quicker).

Clumsy - I know that's what he says - but most of our debt repayments are fixed and seen as though part of the reason we ended up in difficulties was because we didn't have any savings I'd like to start putting something away "no" rather than waiting for another 3yrs or so if I put just £20 away a month in 3yrs we would have £700 (cash) if I don't put anything away there's nothing for contigency funds......without using more of the credit that we do still have available...

Good idea. This is the approach recommended by Mary Hunt in Debt-Proof Living

I would pay the credit card off.

I have just won a battle to get my council tax band reduced, so we have £70 a month 'spare'. I am using this to pay my credit card off and pay off a bed I bought on pay later scheme.

A good credit card to have is the marks and spencer one (I have this). It has no fees for transfering your exsiting balance and the interest rate is only 3% for the life of the balance.