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Original poster

I have £300 to pay off towards a debt which should I pick?

82 replies

Marleya · 18/02/2022 08:03

Very catalogue is currently £1083. Interest rate 39.9% APR minimum payment of 7% of balance or £5.

Capital one is currently £397. Interest rate 34.9% APR. Not sure on the minimum payments I normally pay between 15-20 a month

Next account is currently £215. 24.9% APR and I normally pay the monthly minimum payment between 10-15

I am leaning towards paying 300 off to very as their interest seems the highest and it is the one I am struggling to pay off the most

I could pay my O2 contract off at just over £330 (no interest) and reduce my monthly phone bill from £55 to £7 by swapping to a sim only deal... not sure whether to do this and use the money that would have gone on my phone to pay off Very?

Ive been brought up with no financial help so this is all a big hole to me but I am determined this year to pay debts off. I have done really, really well at managing my money so may be able to pay a bit extra on all each month

OP posts:

marplemead · 18/02/2022 08:11

Those are very high interest rates. You'll never pay them off with paying such small amounts per month. Is your credit rating good enough to take out a credit card with a 24month 0% balance transfer rate and then transfer the Capital and Very balances? If you set the DD to as close to £60 as you can afford, you could have it paid off in 2 years without paying any additional interest. And then I'd use the £300 to pay off the Next account, and cover the fees on the balance transfer.

Original poster

Marleya · 18/02/2022 08:14

I probably could but not sure how to go about it. Do I open the 0% card and pay off each debt, or is a balance transfer a different thing?

OP posts:

ChuckBerrysBoots · 18/02/2022 08:14

I’d be tempted to pay the Next off first, put the remaining 85 onto your capital one and add your usual monthly Next payment to your monthly capital one payment to pay that debt off faster. Any extra you save can go towards paying the capital one balance. Then once capital one is paid off roll that payment into your Very account and any extra payments can go towards paying that off. Make sure you close the accounts once paid off so they no longer show on your credit account and you’re not tempted to use them again.

ChuckBerrysBoots · 18/02/2022 08:16

You could sign up for this www.moneysavingexpert.com/creditclub/ so that if you did decide to apply for a balance transfer card (they are different to 0% spending cards) you can see which ones you’re likely to get without hammering your credit rating.

SilverHairedCat · 18/02/2022 08:17

@marplemead in assuming OP can't get 0% credit cards. I certainly couldn't when I was in serious debt. If you can though, absolutely the best way to go.

OP I'd pay off the Next account and then close it. Use the rest of the money you have towards the Very account.

Then use the money you usually pay for the Next account to increase your payments in the Very account.

Can you up the payments on each account to beyond those minimums?

Original poster

Marleya · 18/02/2022 08:17

@ChuckBerrysBoots thank you for your advice I hadn't thought of it like this. 100% will be closing the very and Next account once paid (racked them up from childs pram, clothes, etc Ive learnt my lesson)

OP posts:

Original poster

Marleya · 18/02/2022 08:19

The only 0% card I have found was as far as Im aware 0% interest for 6 months then 49.9% APR ?

OP posts:

NoSquirrels · 18/02/2022 08:21

@ChuckBerrysBoots

Please do this.

You urgently need to bring those very high rates down and a balance transfer card would be ideal.

There is lots of wonderful advice there and n that site too which will really help you.

In terms of immediate of where to put your £300, I’d see if I couldn’t scrape together the extra £97 by hook or crook and pay the Capital One card off.

Kinko · 18/02/2022 08:22

@ChuckBerrysBoots

This is called the snowball effect and it's very good way to clear debt.

So I agree, I'd do this.

NoSquirrels · 18/02/2022 08:23

What are all your other outgoings, Marleya?

Have you looked for lower rate loans rather than just 0%? Some cards do e.g. 3.9% for the life of the balance transfer.

CeeceeBloomingdale · 18/02/2022 08:26

Normally I'd say pay the one with the highest interest but having three is probably making you feel worse so I'd clear the smaller ones first. Pay off Next, close it and put the extra to Capital One and focus then on putting any extra into that until its gone, then pay off Very as soon as you're able.

Original poster

Marleya · 18/02/2022 08:26

I could probably scrape together £97 and pay off Capital one.

The snowball effect sounds great too though so lets say I paid Next off

Then paid 85 to Capital one and brought the balance down to 312

Monthly payment for Capital one would then be give or take £30-35?

Im just worried about the interest from Very stacking up.. would I continue just paying over the minimum payment then once Capital one clears use that to pay off Very?

OP posts:

Dammitthisisshit · 18/02/2022 08:28

Hi OP. You say your o2 contract is no interest. So in 6 months can you switch it from a 55 to 7 a month deal anyway? If so just keep that where it is and pay the 300 off very account as you suggest.
We’ll done for trying to sort out your debt. It will be worth it.

userxx · 18/02/2022 08:29

Could you speak to very and ask them to give you a bit of breathing space by halting the interest ? My friend has done this with a few of her credit cards, if you don't ask you don't get.

newbiename · 18/02/2022 08:30

If you register for Clear Score (app) it will give you any balance transfer options.

Original poster

Marleya · 18/02/2022 08:31

Very have frozen interest for 30 days so I have about 21 left now

OP posts:

Rainbowqueeen · 18/02/2022 08:33

If you think you can scrape together the 97 quid then do that and pay off the capital one. Then I’d work on the Next one because it’s the smallest. I’d aim to have it gone in 8 months. And I’d use that 8 months to learn as much as I could about finance and start looking at a long term plan.
Make sure you close them both.

I think once you are down to one you have more chance of getting a zero balance card if you can’t get one now. But definitely see if you can.
Good luck

Thoosa · 18/02/2022 08:33

@userxx

Could you speak to very and ask them to give you a bit of breathing space by halting the interest ? My friend has done this with a few of her credit cards, if you don't ask you don't get.

Unfortunately that constitutes an “arrangement” and so usually blots your credit file, which apparently they don’t always warn you about, so it’s last resort stuff. If OP can snowball her way out or get a 0% credit card, it would be better.

It sounds like she’s been stuck in the sun-prime market to re/build her credit rating and it would be a shame to undermine her progress now.

userxx · 18/02/2022 08:34

@Marleya

Very have frozen interest for 30 days so I have about 21 left now

30 days!! How generous.

TheFlis12345 · 18/02/2022 08:34

You need to keep paying above the minimum of the balance will never really go down.

CaptainCarp · 18/02/2022 08:35

@Marleya I would also suggest signing up for clearscore or another free credit check service.
Clearscore lets you know what 0% or low interest balance transfer cards may be available to you. Its also good to see your credit score grow. Its helped my DP as he was in debt when i met him but he has moved it around over the last few years to 0% balance transfer cards & paid most of it off.

I think the 1st he got was only 6 months no interest but then he got 1 for 12 months as his credit rating had increased.

If you have been keeping up with repayments your credit score shouldn't be horrendous but a lot of debt does count as a negative.

SmallOrFarAway · 18/02/2022 08:35

I recently got a virgin money 0% card, am on a very low income, maybe you can do a check in principle on their site? It was absolutely no fee to do a switch and no interest for 18 months.

SmallOrFarAway · 18/02/2022 08:36

Not a switch, transfer I mean. Most places charge a fee to do a balance transfer so I was really happy with that and can get it paid off via a direct debit before the 18 months is up.

OverTheRubicon · 18/02/2022 08:37

Have you spoken to Christians Against Poverty? You don't need to be a Christian yourself, and they and some other groups can help not only with these but also with looking at your wider outgoings, benefits etc to help you maximise your incomings and set a good budget.

BackwardsPrawn · 18/02/2022 08:37

I'd hit Capital One first. This is because it is a high interest for very low minimum payment option - which drastically increeses how long it witll 'naturally' pay off and is a universal credit card so far more tempting to use for something else along the way. Pay it off and close it down.

Take it's minimum payments and hit Very next. Do not allow your Very minimum payment to reduce as the total debt goes down.

i.e. you must pay about £75 a month on that today. Add the £20 from C One and that's a repayment of £95 per month. That will pay off it about 15 months. I'd pick that one next because it has the highest inerest.

Then use that £95 to finish off the Next debt, which by that point will be minimal anyway (assuming you keep paying them £15 a month). 16 months and you're debt free

You can then save that £95 a month to cover expenses in the future, maybe?

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