[Closed] Money help - what would STW do?

What interest rate on the CC? if not zero then perhaps look to flip it to one with 0% and low bal transfer rate.

Unless the card is interest free I'd pay it off. That will give you a few months of saving £82. You can always use it again in October if needed.

What interest rate on the CC? if not zero then perhaps look to flip it to one with 0% and low bal transfer rate.

^^ this

At £82 a month if it’s not zero I can’t imagine you’re paying any significant amount off it.

Assuming it is/can be transferred to 0% I’d leave it - the savings could come in handy for something unforeseen where the CC isn’t much use.

Id pay off the CC and then use that for contingency.

Any jury duty coming up?    😉

Pay the CC off. You have no savings in effect when you owe a CC.

If it's not a 0% card and you don't want to use the savings it might be worth speaking to a bank about consolidating the CC and loan in one single loan, you'll almost certainly get a better overall interest rate that way.

not a 0% - its a platinum barclaycard 🙁

I would also go for the 0% balance transfer on the CC

Here is a good source for checking what is available without impacting your credit rating;

Money Saving Expert - 0% Transfer Deals

Then try and keep paying as much off as you can. Babies are expensive and it would be good to have some cash in hand and a reduced CC bill ready for when the 'fun' starts

Unless you know of some payments you need to make that can't be done on the credit card...

Use savings pay off the credit card.

If then need some spare money for something you can buy stuff/that on the credit card, and you won't have been paying interest (whilst the savings earn basically none)

you can then apply for a credit card with a 0% purchase offer

or alternatively, if you really want to keep the savings incase you do have some cash purchases, apply for a 0% balance transfer offer.

already said enough times but first and foremost get rid of the BC £4K debt; whatever you're sending them each month, a chunk will just be the interest on your balance.

Whether you do that by moving it to a 0% balance transfer or just use the savings...... personally I like a rainy day fund and I can trust myself to pay the card off within the balance transfer period, others may differ and also looking at the amount you're paying to the BC - £82/mo even if it was all going to the capital, would still take 50 months to pay the £4K off and you won't get a 50 month 0% deal. So you either need to increase the amount you're paying off or accept that in 2 years time when your 24mo balance transfer interest runs out you either need to have money to pay off the remaining amount or get onto another balance transfer. Which is possible, plenty do that but - and i don't want to sound harsh - the debt you have and the rate you're paying it off makes me think you aren't the best at this and might end up back where you started?

Would  https://www.stepchange.org/ be a sensible call for you to draw up a plan based on expert advice?

Is it a joint credit card?

The only reason i'm asking is that the affordability calculations might change when your partner goes off on mat leave which might effect your ability to get a balance transfer card.

Pretty much anything is better than your current situation. the Uswitch site is pretty good for illustrations, if you got a 36 month balance transfer card and put the whole 4k on it you'd need to pay £113 a month to clear it within 36 months and would only pay about £100 in fees/interest. 

To give you an idea, assuming a 19.5%APR on your card over 36 months have to pay $144 a month and you'd pay a shade over £1200 in interest

if you carry on at (with the assumed APR)  £82 a month it will take you 7 years and ~£3000 in interest payments!

Agree with much of the above - either use your savings to clear the CC debt and/or at the very least look at shifted onto a 0% interest deal.  There are plenty of these around, though the general consensus is they're about to start reducing the interest free periods on offer so I wouldn't hang around on this.

Personally, I'd go somewhere in the middle - find the longest 0% balance transfer card (Money Saving Expert is your resource for this). move whatever balance you can afford to pay off over the period to this card and dip into your savings to pay off the rest.

e.g. if you can land say, a 24 month balance transfer and could realistically afford to pay that off at £100 p/month, shift £2400 from your current interest bearing credit card balance and clear the remaining £1600-ish off from your savings.

Result: No further interest incurred on the remaining balance, whilst paying off more or less the same as you do now AND a reasonable rainy day pot to dip into should you need it.

Interest bearing credit card debt is a plague, get rid of it as soon as you absolutely can.  Been there, worn the t-shirt and got the scars to prove it.

Fortunately never been there, I had fiscal prudence drummed in at an early stage.

BUT - don't also fall into the trap of thinking credit is evil; if you can play by the rules and pay off within the interest free period - whether that's the 24 or 36 mo of a balance transfer or even just the period between spending and statement payment due date - it works very well. Another example is monkeyboyjc's car  https://singletrackworld.com/forum/topic/2nd-hand-car-woes/ - if that had been on a credit card even if just the deposit he'd be benefiting from a heap of consumer protection he hasn't currently got.

There's financially prudent in normal times and there's 'just had a baby' prudent.

Sadly the way loan interest is loaded there's not much point paying it off at this late stage.

You're income is about to dive into the shitter and not recover for... well ever, but certainly the next 4 years or so are going to be tough unless you've got parents who will look after Baby so your wife can work even then childcare is expensive - full time, you're looking at £700 to £900 a month...

If your goal is to reduce over-heads then pay off the loan £180 a month saved, that should cost you £2700, with the remaining £2000 pay of half the CC and transfer the rest onto a 0% card, if you can get one of the 36 month ones you could pay £55 a month and be free of it by the time it's up. So, lets say £210 a month lower outgoings, debt free in 3 years but £4700 savings gone.

But, as someone who's youngest is starting school full-time in Sept, it's graft - we're about £3k in debt from just normal day to day crap over the last 3.5 years, but in that time we've spent about £32k on childcare so I don't feel bad about it.

See if Barclaycard are doing interest free cash advances. If so get cash into you bank account to pay off the BC balance. You’ll pay a fee which is equivalent to that of a new 0% card without the hassle (risk) of getting another card.

No point transferring 4 k to a 0% card which will cost you circa 120 quid for the pleasure of doing so if you're only going to keep paying off 80 quid a month. Get it consolidated as one loan then cut it up and behave yourself!

No point transferring 4 k to a 0% card which will cost you circa 120 quid for the pleasure of doing so if you’re only going to keep paying off 80 quid a month.

Huh?  Assuming that's 50% interest, it'll pay for itself in three months and you're paying off double the amount, surely?

Babies are expensive#

This is true, but toddlers are more expensive, school kids even more so.  I am not saying this as a voice of doom but instead to warn against putting the issue aside in the expectation that your costs will go down in the future.

Get the CC shifted to 0%  If you are really worried get yourself along to Citizens Advice or a decent debt support charity to help you work out a payment plan with your lender.

@franksinatra I don't agree with that entirely, my 8 year old ain't cheap but she's nowhere near as expensive the the 3 year old, or the horse for that matter!

Pay off cc in its entirety - there is a time and a place for credit but where you are probably isn’t it.  Keep paying the loan off and add the £82 to what’s left of your savings.

You're basically paying £82 a month to have £4k in savings.  That's a crappy deal.

Pay off the credit card and you pay £0/month to have £4k in available credit which you should avoid using at all costs (ie only for boiler breakdown, vehicle repairs etc - beg, borrow or steal before using this credit, unless you have the money in the bank to clear it down the following month).

The loan is what it is.  Don't consolidate it with the CC debt, you'll end up paying more overall and for longer.  Pay it off over the remaining period (using the £82 you're saving on CC repayments), and once it's done redirect the £150/month into savings instead.

Ask (and make a case) for a raise at work if you can, because if you don't ask, you won't get, and a lot of the time the worst they can do is say 'no'. Your situation may mean this isn't a goer, but increasing what you bring in is always worth pursuing as a possibility.

Id pay off the CC and then use that for contingency

This ideally.

You could balance transfer it onto another card for peanuts, but if you've got the cash to clear it then you may as well.  That 4700 isn't doing anything for you in the bank.

It's not clear what your next move should be TBH, as no-one here has enough information to properly advise you (including myself)

A lot of people are shouting "pay it off" .. I can totally understand that, but you also have kids on the way and IME things get expensive with a lot of one off costs.

I'd go onto a site like MoneySavingExpert, post a full SOA (Statement of Affairs), which will show income, assets, liabilities, bills etc, and ask for advice. It'll take you more time to compile that than the 3 sentences of information you've produced here, but you'll also get much better advice.

HTH

Right - been proactive as it is costing me money as it is sitting here doing nowt!

Applied for and got the Virgin credit card at 0% on balance transfers for 32months so will transfer the balance and pay that back over the time and if i run out of cash can transfer to another 0% at the end of the 32 months 🙂

cheers all

Good work.

FWIW, I was in a similar position maybe a year ago.  Fairly hefty credit card balance, a three-figure minimum monthly repayment where I was actually paying off about tuppence a month from the actual balance.  Shifting it to a new 0% card (also Virgin) was the best thing I ever did.  I've now paid off a big chunk of it, and have sufficient funds to clear it outright tomorrow if I wanted.  (I haven't done so because, nice as it would feel to be debt free for the first time in years, the money's better off earning interest in my bank account.)  If I hadn't moved it, there's no way I'd be in this position now.

I think I’ve had 10-15 credit cards over the last 20 years and I’ve never paid a penny in interest, with cash back deals I’ve probably earnt more interest getting them than the interest on my savings recently. :/

When you get the new card register it then cut it up and throw it away. Don’t thjnk about it, just do it. No point in getting a new account then spend lots on it as “it’s 0%” - you’ll be worse than before. The temptation is very great - I’m normally very sensible but when I got a 0% card for house renovations last year I was so close to buying a new TV because I thought I’d pay it off later - save up!!

if you still have the account you can get a replacement card in 2-3 days if you really need it BUT it’s probably long enough for you to think again about what you were buying anyway.

Never underestimate the benefit of having a bit of cash in the bank for unforseen circumstances.

thats my thinking too john

Yeah it's a no brainer with the 0% balance transfer cards with 0 fee at the moment, stick the loan balance on it to (if you can pay it off early without penalty). I would then pay £250 a month off the transfer card initially (saving you £12 a month on what you're currently paying) and see how the baby expenses go. If you can afford to pay more off the balance then do it. Keep the savings for a rainy day (at least for 6 months post baby birth) and then either invest or pay off some of the cc balance.

Bit of an update - just sorted the balance transfer, pleasant surprise as the card was at £3176, not £4700 so should be paid off in the interest free period so thats a winner.

The loan stands at £3100 also and the interest rate is 4%  so should be paid off by Nov 2019 unless i can do anything with this to save on the £171 a month payment?

It's likely repaying the loan early won't save you te interest (front loading think it was called, not sure its allowed anymore) so look very carefully at the Ts&Cs before committing. If you can transfer it onto the 0% deal do so, Fuzzy has done the maths above - but be super disciplined (cut the card up) about paying it off.

Moving the loan onto the cc/paying it off would save £70 BUT cost .6% of the balance to shift it so probably not any point.

Upped the CC payment to £100 a month so that WILL be paid off in the interest free period, if not i.e. we need the cash from the payment, will move it to another interest free deal in 32 months time 🙂

cheers all!

Babies are expensive and it would be good to have some cash in hand and a reduced CC bill ready for when the ‘fun’ starts

This is true BUT ....

If you are a first time parent then you are a marketing dream....

Lots and lots of the stuff you think you need you don't.... indeed loads of it you end up using once in our experience.

From the top of my head a changing table... when we ended up just putting the baby on a free changing mat on the bed.  Expensive convert-able pram.... etc. etc.

Just saying .....

second child so aware cheers 🙂

second child so aware cheers

Ah so you already have all that stuff you don't need 😀

(Just thought it worth mentioning)

First is 8!