Which to pay off first?

[steve208]

I have some debts on two credit cards, i have now cut these cards up and resolved to pay the debt off.

I cannot pay it all off right away so would be grateful if someone could advise me the best way to pay off this money.

The amounts outstanding are �1,100 and �380. I can afford to pay off the �380 now but should i? Is it better to pay a chunk off the higher debt? TIA

[Dassie]

You must look at what interest rate these two lenders are charging you. You pay off the one charging the highest interest rate first. For example one card may be charging 13.9% and the other 15.9% so pay off the 15.9% one first to save that extra interest you would have to pay.

[steve208]

Thank you.

I have looked at my latest statements and the details are as follows.

The card with �1,100 on is charging 1.240% per month, so 14.88% per year?

The other card with �380 on is charging 1.456% so 17.4% per year?

[sense4all]

check out this ,as previously recommende by another aber a few weeks ago, lots of good stuff here :

http://www.moneysavingexpert.com/

[Dassie]

Ok so pay off the �380 first. Good Luck

[Mrs_Pegasus]

WIthout even looking at the money saving expert site I know what he will recommend. Pay off the �380 and pay off at least the triple of the minimum amount on the other card if you can.

Can you not transfer this balance to a interest free card? i.e. Tesco are offering interest free until May/June 2007.

[ugly_bob]

1.24% per month is actually 15.9% APR
1.456% per month is actually 18.9% APR
These are quite expensive rates - try and change them to cheaper cards, but watch out for the balance transfer fees most are now charging (typically 2%)

[steve208]

I dont think it is worth switching to tesco as there is a 2% fee for the balance transfer despite the interest free period. But it may be worth giving them a ring!

[steve208]

on the application form for tesco credit card it asks for employers phone number. Now i know i should not do this but if i give on the form my contracted wage amount then its not enough, so if i put more then will they phone my employer to check how much i earn?

In truth its not a comlete lie because i dont work my contracted hours i very often do a lot more.

[cocojour]

Sainsburys bank is offering 0 per cent on balance transfers for 5 months with no transfer fee. As a confirmed 'rate tart' , my advice would be to pay off what you can during that period, and avoid spending on it.

[Mrs_Pegasus]

I used to have a sainsburys card but watch it if you dont clear it before the interest free period - their rates are now 22%!!!!! Thats appalling value for money!