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Advice please ...

Hopefully someone can give me some advice on a decision I have:

Currently have a loan (three years still run - £280 per month - early settlement value £9,400)

Have a credit card debt of £9,200

Have cash in the bank £9,000

I have a car which can be sold privately for c. £7,000

What I would like to do is this:

Transfer £3,000 cash to a savings account (to pay for some replacement windows and a small amount of rainy day money)

Transfer £6,000 cash to part repay the loan, and then increase the credit card debt by £3,400 to completely settle the loan.

The credit card debt would then be £12,600, but I would reduced this by £7,000 to £5,600 when the car is sold.

I then intend to leasing a car (c. £200 per month)

I know this probably a daft question but, can anyone offer any advice on my "plan", and is this the most sensible way of managing what I want to do. Thanks in advance trevor

Reply to
tmUK
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It's hard to say without seeing interest rates. I think a good general rule is to pay off the highest interest things first (typically credit cards). There's not much point saving money if you have debts to pay off, as you've got to look at the difference between the interest rate you pay on the borrowing and what you get from the saving. It's definitely worth looking at switching to a 0% credit card if you haven't. Remember not to use it for spending though until you pay of what you owe on it.

cd

Reply to
criticaldensity

Thanks for the reply m8.

The credit card is currently on 0%. What I am unsure about is whether I should pay of the loan (£9,400) with the £9,000 cash in the bank, or whether to "safeguard" £3,000 for the savings account, and then settle the debt when the car is sold.

Many thanks

Reply to
tmUK

I suppose you should think about how likely you are to need the safeguard, and whether you could borrow the money again if you needed to.

You should also consider when the 0% on the credit card runs out, and whether you could switch to another.

Probably best to talk it over with citizen's advice or something.

cd

Reply to
criticaldensity

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