Save or pay off debt?

H

hoochie

Guest
Hi

I have credit card debt of about 4-5k, and no savings:eek:. I am currently paying 10% off my credit card each month, and as the payments are quite high it leaves me with no room for savings.

:confused: I wonder, should I continue to keep putting my money towards paying off my credit card, and save once it is cleared, or should I reduce my CC payments and put my money into savings?

Thanks!!
 
Pay off your credit card and forget about saving for the moment.

The interest on the credit card will be more than anything you will get on savings.

You may also consider if you can do balance transfer to another card to see if you can avail of a 0% or lower rate for a period.

I take it you no longer use the credit card and are not adding to your debts?
 
Thanks CCOVICH!

I am trying not to use my cc as much as poss, but I often end up running out of funds by the end of the month and end up using it. Which leads to another question, should I maybe reduce down from 10% payback? But I'm afraid if I do that it'll take me forever to pay it back!:(

FYI I did switch my card to Halifax a while ago, so got 6months interest free... am probably coming to the end of that now :(

I guess another option would be to take out a loan to pay off the CC, I don't want to do that though, but, do you think that's a better option?
 
You need to address your spending habits then. You would do well to start a thread in the 'Money Makeover' section and see what advice is offered.

Note that 'interest free' generally only applies if the balance transfer is cleared in full by the end of the 6 month period and so you could be faced with a hefty interest bill.
 
oh god, really? oh no, better check that out :(

thanks very much for your advice!! :) I'll check out the money makeover section, I really do need one!!
 
I would certainly [broken link removed] because you are at the mercy of banks and credit cards should they increase thier interest on the loan. Citi bank I heard increase their average interest rate to around 30% even for people who have never missed a payment and have stayed within limit. I for one am trying to get rid of my asap.
 
hoochie said:
oh god, really? oh no, better check that out :(

thanks very much for your advice!! :) I'll check out the money makeover section, I really do need one!!
Click to expand...

You might think about attending a money management course as well. If you can't control your spending on the CC how about just simply getting rid of it.
 
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