CU Loan Vs Savings & CC Bill

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Pia Bang

Registered User
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Hi All,

Just wondering if anyone can tell me the best route to go.

I currently have a CU loan of approximately €4,200 @ 9.6% pa (& 27% rebate on interest paid so net cost of approx 7% I think), and right now, my CU savings is approximately the same as the loan.

I also have a CC bill of €3,400 approximately @ 13.9% pa (due to apt purchase & wedding in last 3 months of 2005).

Would it make more sense to pay off the CU loan with savings, leaving me with no savings, but able to concentrate on paying CC bill more effectively?

If I continue paying off my loan at the current rates (approx €90/wk), I should have it completed by the end of the year, I can still afford to pay approx €60/wk to the credit card, and with bonuses etc, I should also have it repaid by year end.

I would appreciate some advice.
Pia
 
Hi Pia.

My advice

1. Pay off the credit union loan with your savings.
2. See if you can transfer the balance on your current credit card to a new credit card and avail of a 0% rate on the balance transferred for 6-9 months. You then have 6-9 months to clear the balance without incurring interest. You will find a list of the best balance transfer deals in the link in my signature (Best Buys).
3. Stay out of Pia Bang until you have cleared your credit card bill!

Any further questions, please don't hesitate to ask.
 
You should use the bulk of your savings to pay off your credit card bill, as it has the highest interest. Then use as much as possible of what's left of your savings to reduce your CU loan. There is no point at having savings while borrowing money. Then you can throw all available cash (including what you would use to pay the now defunct credit card bill) at the CU loan until it is paid off. Stay off the credit card ! If you don't want to cut it up, put it in a cup of water and freeze it. This is a good way of preventing impuse purchases - I kid you not.

At that point, start rebuilding your savings; the best way is to throw the same amount of cash that you were spending on load repayment into a savings account, as you will not miss the extra money.
 
well i would say
pay visa first then cut it up!
secondly i would not throw all my savings at the CU loan, pay some but really you should keep some incase the unforseen happens and you need to access monsy fast.
Think about upping the CU payments if you could to clear it quicker.
My CU charges 6% but gives 20% rebate so it is really not all that bad to have a loan - check out the terms of your own CU as they all differ a bit.

I wouldn't call myself financial guru of the century so you could ignore if you like
 
When I first got a credit card, I felt i was buying for free... didn't feel like I was spending money...I rang up bill to the limit, got refused a box of chocolates in some fancy store on Fifth Avenue, low period!!... when I got home I got a credit union loan to clear visa card and overdraft...yeah that worked a treat, was left with three loans instead of one! Actually did this a few times, till I made up my mind to clear the visa bit by bit...but took perseverence.

Moral of story, get a laser card, at least you're spending money you have, as opposed to money you don't have... and pay off the credit card first, the credit union interest is lower and they are generally more flexible..but if you don't respect your visa, then don't use it. It's tough but good advice...trust me!
 
micamaca said:
When I first got a credit card, I felt i was buying for free... didn't feel like I was spending money
Click to expand...

How can people think paying with a credit card is like buying for free? I once met someone working in payroll who say she didn't have one because she couldn't trust herself, as she considered it as "free money". I only have the credit card to book my flights and maybe for gifts or expensive items when it, but pay it off the next month....it's the only way to go. People nowadays get into too much debt without realising who this will affect them in thear near future (credit rating, applying for mortgages, etc)
 
Please keep the thread on the topic of paying off the credit union bill or credit card first-if peole want to discuss credit card debt etc. they can start a separate thread.
 
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