Wondering whether pay of credit card or mortgage?

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I am in a very fortunate position to still be working from home during lockdown and as my outgoings are reduced by not being able to go I have a bit more money each month than usual.

I have 15k credit card debts across 3 interest free cards, I have worked out a plan to pay these off between now and end of next year, 2 will be paid off in full and 1 will have 1k left when the interest free term ends.

The total I will have paid, by end of this year, if I stick to the plan, will be £5k. Now i'm starting to wonder if I should be paying less on the cards and more onto my mortgage instead. This would mean though that at the end of the interest free period on my cards I'd have a balance that would need to be transferred.

Is anyone able to advise whether its better to just get the cards paid off, I don't like knowing I have this additional credit card debt, or, as they are interest free should I pay less and pay more onto the mortgage?

Thanks

Why don't you have a look at the mortgage overpayment calculator on Matin Lewis' website, www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

There is lots of other info on his site about clearing debts

Usually your credit card interest rate will be much higher than the interest rate if your mortgage so by overpaying you’re mortgage you’ll be paying more interest on your credit card and that will be more expensive. See if you can work out a plan to get rid of your credit card debt before paying interest or as soon as possible then look at overpsyingvyour mortgage, the calculator posted above will show you how much impact the overpayments will have which is a good motivator, check your mortgage doesn’t have any penalties for overpaying.

Thank you I will look at the calculator. I was thinking paying mortgage might be better as there is interest and then moving cc debt to another interest free card at the end of the term but I really want to just have the CC debt gone! Will take a look at the link shared, thanks for replying.

@Ohnonotnow

Thank you for that, just calculated extra payments on our mortgage, wow! Definitely going to overpay more. What a huge difference!

If the balance transfer fee is higher than your mortgage interest rate then it's better to pay off the credit card.

Overpaying mortgages should normally only be a decision against paying into a pension as an alternative option due to the low interest rate

Mortgage would save more interest payments but are you certain you will pay off the CC before the I/f period ends? If there is any risk to that, I would keep the money to one side (getting the best return you can on it) until you know you don’t need to pay off cards, only using it when you have cleared the CC.

I'd pay off your credit cards.

I'd had some credit on 0% thinking I'd pay it off in time, my circumstances changed, the 0% expired and I couldn't get a new 0% deal.

You never know what's around the corner.

Definitely pay off the credit cards first and once it’s gone you can overpay on the mortgage. I once read somewhere that as tempting as it is to try clear the biggest debts first it’s a lot more realistic to start with the smaller ones because you can clear them in full faster and cut out a bill entirely.

I think it's a good idea to get rid of unsecured debt (credit cards, loans etc) before secured debt such as mortgages

Pay off the cards. We are heading into a very uncertain future and you cannot guarantee to always have access to interest free balance transfers.

The thing is, there's no guarantee you'd be able to get another interest free card at the end of the term.
I'm in a similar situation, and I've decided to prioritize paying off the credit cards (although I'm saving the monthly payment, and will pay it off in large sums every few months, purely because of the current situation)

The other thing to consider is that if you need to remortgage you'll get a better deal if you've got no credit card debt.

I’d always pay off credit cards first!

Credit cards first without hesitation.
Switching to 0% is never usually completely 0% either as you usually have a balance transfer fee

I would definitely pay off the cards. It’s not just about the bottom line. It’s about un/secured debt and ‘acceptable’ debt (realise this is personal). Having three credit cards hanging over you is not good. Having a reasonable mortgage is just part of life!

Pay off credit cards first. Do you have an emergency fund? If not, your next priority should be saving 3-6 months expenses that you don't touch unless it's an emergency ie;job loss, broken boiler etc. Then after that, overpay the mortgage.

Also, have you honestly addressed the reasons why you owe £15K on a credit card? Is your budgeting now under control so you don't run up debts again?

Definitely credit cards, is it worth porting it all over the one card now and slowly and consistently paying it off

There is absolutely no guarantee they would keep on letting you have interest free balance transfers

Credit cards. And work out a way to avoid that level of debt in the future

Thank you everyone, this has been really helpful. I was thinking it was better to pay the c cards and think I will continue to do this for may reasons outlined above, I want to be rid of this additional debt and i know it will be better for me to do this when its time to remortgage as well + I may not be able too get another good interest free deal. Thank you all for your comments.

Pay off the cc that won't be paid off after the 0% interest ends. Divide the amount owed on it by the number of months left for interest free and set up a standing order to ensure it's completed before that time.

Also if possible allocatw an amount you are overpaying and can manage and then keep it up.

Ie if you pay £100 a month to a card dont reduce that as the debt gets less, keep paying thay extra and just change where it goes. Then when cc are gone carry on paying that money into savings/mortgage as you are then used to not spending it.