if you received £30,000 inheritance & had around £5000 on credit cards..would you pay them off - or continue to pay the monthly bills & keep your capital sum in a high interest account? - what would you do?
2007-02-15 05:18:13 · 11 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
Pay off the debt first! You can't grow true wealth as long as you owe money. Plus there are huge psycholigical benefits to be reaped when you have no debt.
2007-02-15 05:28:43 · answer #1 · answered by Anonymous · 3⤊ 0⤋
You should pay off the credit cards. You most likely are paying a significantly higher interest rate on the credit cards than you could receive in a bank account. I don't know what the rates are in your area, but here in the U.S. credit cards can charge upwards of 18-20%, while money markets accounts are at best yielding only about 5%.
The best part of this situation is that you'd still have £25,000 left after the payoff. Be sure not to run up the credit card balances again, though. Good luck.
2007-02-15 05:25:56 · answer #2 · answered by Marko 6 · 2⤊ 0⤋
It's a simple easy answer, if you put 5,000 pounds away, will it make as much or more than the interest being charged on the 5,000 you owe???
I'm not looking at the aggreate of 30,000 because then we aren't comparing apples to apples.
If you can't get more than the interest being charged by your credit cards then I suggest you pay it off.
El
2007-02-15 05:22:47 · answer #3 · answered by El_Nimo 3 · 1⤊ 0⤋
You are paying more in interest on the cards than you will get in an account, pay the cards off!!
2007-02-15 05:21:08 · answer #4 · answered by wish I were 6 · 1⤊ 0⤋
If I wasn't having any trouble meeting the monthly payments, and if I could invest the money at a higher rate of return than I was paying on the credit cards, I would hold on to it and invest it.
2007-02-15 05:22:41 · answer #5 · answered by Brian G 6 · 1⤊ 1⤋
You pay off the credit card bills, then invest the remainder. ANY time that you have an opportunity to get rid of debt, you should do it.
2007-02-15 05:26:50 · answer #6 · answered by mom2trinityj 4 · 3⤊ 0⤋
Pay off the debt, then fully fund your emergency fund (3-6 months of expenses) then put 15% in your retirement fund and then start planning your child's (if you have one or several) college fund.
I seriously suggest you read The Total Money Makeover by Ramsey, he details out how what to pay off in what order and save, etc.
2007-02-15 05:30:26 · answer #7 · answered by mldjay 5 · 3⤊ 0⤋
I would pay it off immediately.
You shouldn't be spending money on other things when you have that much credit card debt. The interest will kill you.
2007-02-15 11:22:50 · answer #8 · answered by Venin_Noir 3 · 1⤊ 0⤋
You'd rather pay 19% on your credit cards so you can collect 5%?
2007-02-15 05:22:38 · answer #9 · answered by Oh Boy! 5 · 1⤊ 0⤋
Get rid of the debts. Without them in your life, you can quickly rebuild it into your accounts.
2007-02-15 14:31:00 · answer #10 · answered by Jen G 5 · 1⤊ 0⤋