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Original poster

Should I stop paying off more than the minimum on my credit card so i can 'live better' and go on holiday?

89 replies

user1499590110 · 30/07/2017 11:46

I already posted a thread and im worried im now going to sound like a journalist!!! i'm not. i promise!

basically the background is that i went on a date and this person was talking about his ex being totally shit with money and how she 'thought it was ok to live off 100 a week' - i.e. she wasnt bothered about advancing her career or having any plans to save etc. i found his comments a bit offensive.

these conversations have made me worry about money and have spoken about it with friends. i try to save 100 a month and i live off about 90 a week (which i also have to buy food with, but this excludes travel so i can do the odd thing like go to the cinema). i earn around 30k. should i stop paying off more than the minimum on my credit card (it has 6,500 on it!), and live a bit better instead? my friends think it is crazy that i put so much back into my credit card when it is interest free for the next 2 years, but i feel like it is reckless not to try and pay off the maximum so that it is paid off when the interest free period expires. i havent been on holiday for 2 years because i cant afford it, but having spoken to my friends, their view is that i can afford it im just handling my money badly, and i should transfer the credit if i havent paid it all off in 2 years...

OP posts:
Mamagin · 30/07/2017 12:29

Be disciplined, find an interest paying bank account and put the extra money in there to pay off the credit card loan at the end of term. Obviously keep paying the minimum!
You may only earn a few pounds in interest, but better than nothing! Money saving expert is the forum to be on.

TestTubeTeen · 30/07/2017 12:35

Save the money to pay off the CC in a Regular Saver account every month . The First Direct Regular Saver pays 6% interest, I think, so if you save the £300 pcm over 2 years that will build towards your total CC debt you will have a few hundred pounds extra, earned in interest.

That's how to make your money work for you.

But it is irresponsible to just keep a debt going in order to spend. IMO.

BitterAndOnlySlightlyTwisted · 30/07/2017 12:37

It makes absolutely no sense to me to put aside any savings while you have such a HUGE debt around your neck. If you've been "trying" to save £100 a month how much do you have salted away now?

You need to have that card paid off by the time the interest-free period expires. Think the unthinkable: what is going to happen if you lose your job? You suffer a period of illness which mean a drop in income or no income at all? This nice, new car needs expensive repairs?

I've been where you are now and it might all feel do-able right now but you're really in a much more precarious position than you may appreciate.

Be frugal, get that debt paid off asap and then you can "live better" without the worry.

indigox · 30/07/2017 12:39

If he has an issue with women who can't handle their finances surely the issue here is going to be the fact you have £6.5k in debt?!

SyrilSneer · 30/07/2017 12:42

Does everyone on this thread who has a car they don't own outright pay off extra each month? Think you're getting a hard time here OP! It's a big amount but it's not as if this has been spent on shoes and cocktails. When you talk about "minimum" though it makes it sound like you pay the minimum set by the card company; but your posts suggest you mean the minimum amount needed to have the balance paid off in the interest free term. If you're doing the latter then I don't see why you would pay extra if if means you have to scrimp in other areas.

Aussiebean · 30/07/2017 12:43

I take it none of your friends have tried to get a mortgage. The mortgage companies will be very interested in your spending and how responsible you are paying that debt off.

Your credit rating will be much better then theirs getting you a better deal.

Pay it off and live within your means

Rainbowqueeen · 30/07/2017 12:47

So you actually sound reasonably financially savvy, in that you needed the car for work and bought it in a way that avoided you paying any interest and are paying it off quickly.

Keep doing what you are doing and don't listen to your friends.

category12 · 30/07/2017 13:08

It's no point saving £100 a month when you're that much in debt (unless it's for specific bills you know you're going to use it on, like I dunno, car mot and service). The interest you will be getting is tiny. Instead chuck more at the debts.

Mamagin · 30/07/2017 13:21

But if the debt is interest free for a fixed term, it is pointless paying more than the minimum. It's much better to open a special account, as testtubeteen says above.
Although all the po faced remarks above would make me want to swan off to the South of France and spend all my money on gin.

Neutrogena · 30/07/2017 13:36

Grow up and pay it off.
Taking on rent is borrowing from yourself in the future, with interest. It's a mugs game.

millifiori · 30/07/2017 13:43

You sound far more sensible with money than your friends. Your credit card debt is for a specific, necessary one-off item and you're paying it off, fast, before the interest free period is up. Keep doing this. You can then transfer your balance to another interest free card and go on holiday, paying the money back in the same way if that's what you want to do.

Getting out of debt was one of the best things I ever did. I worked my boots off to do it, but ever since, money coming in is mine to do what I want with after all bills are paid, not immediately siphoned off to debtors.

Whathaveilost · 30/07/2017 13:44

I would have a look at how long you have left interest free. Divide the balance by the number of months and aim to pay that or above.
You have a compromise there. The money you have borrowed is not costing you any extra as it is free ofrom interest and charges.

Not all debt is 'bad' it's how it's managed and how you make money work for you.

annandale · 30/07/2017 13:47

Definitely pay it off.

I think having a small cash cushion is sensible even if you are paying off debt, but once you have £400 or so I would focus on getting the debt down asap.

Date man sounds utter arse. Dodged a bullet there.

Mum4Fergus · 30/07/2017 13:49

Definitely pay it off ...throw every penny you can at it until it's gone. Appreciate you've 2 years interest free period remaining but a lot can happen in that time...if you were to lose your job and have no income for say 6 months...where would that leave you?!

squoosh · 30/07/2017 13:50

Although all the po faced remarks above would make me want to swan off to the South of France and spend all my money on gin.

I know. Irritating aren't they?

Puffpaw · 30/07/2017 13:52

Pay it off, save up for things and sort out your pension. The younger you start the better. Your friends will be moaning in decades to come that they don't have a house, only the state pension and are bankrupt. Don't be like them.

Starlight2345 · 30/07/2017 13:52

I worked it out as £270 a month to clear in 2 years...How long do you have left though and how much do you owe?

I think the other thing to consider is no one knows what the future holds..So yes clearing when you can..

Puffpaw · 30/07/2017 13:53

Irritating because they are right and it is not much fun. But personally I'd rather be free than a debt ridden wage slave.

mintbiscuit · 30/07/2017 13:54

If you owe £6500 and have 2 years to pay it off, you should be repaying ~£270 pm in repayments to ensure debt is cleared. Are you?

Do not think about transfering the balance to another interest free loan. What if another emergency to pay for comes up? What if you lose your job?

Trust me. Keep on top of your debts. I speak from bitter experience.

Craicvac · 30/07/2017 14:06

I think you've been very sensible. 0% credit cards are a much better way of financing a car than bank loans and finance packages.

I've just finished paying off an interest free credit card and it feels great! I set up automatic repayments to clear the debt in the time allowed, but then also put money aside into a savings account as much as I could. That meant that if things went smoothly, I was debt free at the end of the time, with some extra savings, but if there was a problem with job/ illness etc i would have some money set aside to put towards the cc, and it was gaining interest for me, not the cc company.

bananafanana1 · 30/07/2017 14:13

Good work on the 0% finance.

Keep chipping away at it.

And cut up the card so you're not tempted to spend further.

If you're feeling flush one month /get a bonus then buy yourself a little treat and then whack the remainder off on the card

If you did transfer to another deal in two years you'll have to pay 1-3 % of the balance as a charge anyway so it would be costing you.

IamalsoSpartacus · 30/07/2017 14:22

Hi user, you sound well-organised! I am trying to pay down my credit card and would like to live on less than 100/month to help with this. Do you have any tips e.g. are you frugal with lunches, mealplanning etc

Mum4Fergus · 30/07/2017 14:37

There is loads of financial support/advice over on the Money Matters and Credit Crunch threads for anyone who needs it x

squoosh · 30/07/2017 14:38

Irritating because they are right and it is not much fun. But personally I'd rather be free than a debt ridden wage slave.

Nope. Irritating because the OP seems to be following a sensible course of action but had still been lectured by some as though she's a profligate ninny.

Puffpaw · 30/07/2017 15:16

OP asked for advice? Hardly lecturing if posters then give advice...