Car v credit card

[PugwasHDJ80]

Mrs P has a our first daughter coming along in 4 months time.

we currently have an £800 old focus st170 for one car.

we need another car (so i can get to work, and she can get around with baby whilst off work).

have 5k.

do i pay off the 5k credit card bill and buy another banger, or buy a newer estate car and keep paying the interest on the credit card?

can't mke my mind up- heart says new car to look after mother and baby, head says pay off credit card and be financially sensible. what would you do?

[greggy50]

Go for a banger just because its a cheap car doesnt mean has to be st and take the sensible option imo
Maybe pick up something like a MG ZT estate can get them for peanuts and make a good reliable family car for very little money.

[Dave Hedgehog]

most cards have horrific interest rates often 18% plus, its a very expensive way to borrow money

you could try transferring it over to a 0% offer card, with a view to paying it off in 18 months time

[obob]

Pay off the credit card. Just get a safe banger.

[Bohally]

Pay off the CC.

There may come an instance when you need the 5k in the future. All fine and well having a fancy car but not at the expense of the credit card. Also, unless its an interest free card you'll be paying interest which will cost you even more in the long run.

[HBFS]

The later without doubt, unless you're making substantial replayments on the CC every month. You'll be paying loads in interest.

I only had a CC limit of 1500, but I was paying £50 quid a month in interest. It lasted 5 months...

[gazchap]

PugwasHDJ80 said:

can't mke my mind up- heart says new car to look after mother and baby, head says pay off credit card and be financially sensible. what would you do?

Credit card.

Alternatively, take out a new credit card with a 0% interest for X months offer, transfer the balance to that card, buy a car while also saving money so you can pay off the credit card with no interest charges.

[abbotsmike]

Go find an older high mileage volvo. Safe and cheap!!

[dm46]

why not pay 2.5k on the cc and put the rest into a safe, reliable car? I used to have an st170 and if you like it why not upgrade to a st220 estate?

http://www.ebay.co.uk/itm/2005-55-REG-FORD-MONDEO-...

[Bill Carr]

abbotsmike said:

Go find an older high mileage volvo. Safe and cheap!!

This - a grand will get you a perfectly decent V40, maybe a V70 if you can stomach not having a diesel. Pay £4k off the cc and balance transfer the rest to a 0% one. Win.

[Bridgewaterfalls]

Congratulations to the two of you, enjoy your sleep whilst it lasts!

It depends on your income and outgoings. Assuming you are not saving (or anticipating saving) significant amounts, and your income is likely to be static (perhaps evenfalling with mat leave)then consider the situation. You owe £5k and have £5K in the bank, you have a zero balance, eg zero owned. If the CC debt is not on a zero % transfer then you are paying very high interest on that £5k as it is an unsecured loan.

Financially the most sensible suggestion is to do a 0% balance transfer on the £5 you owe, and buy a decent snotter for your wife with enough room to fit all the baby crap for next to nothing. Save and pay off the 5K before the 0% balance rate runs out. Perhaps playing the "rate tart" for a while.

A decent older car choosen wisely and a 5K car will not cost any more to run and will be equally safe.

If your income is secure and you want a newer car, consolidate the lot and pay it off over a defined, and hopefully short, time.

Anyway, best of luck over the next few months.

Jim

[fridaypassion]

Totally totally pay of your credit card. Credit cards are the work of the Devil.

I've been 10 years without one and its not something I have missed once!

[Dave Hedgehog]

fridaypassion said:

Totally totally pay of your credit card. Credit cards are the work of the Devil.

I've been 10 years without one and its not something I have missed once!

credit cards are superb, I earnt £350 last year from using mine in cashback and it boosts your credit rating

just dont ever borrow on one unless its a real emergency or a 0% deal

make your card work for you

[Waynester]

Credit card! I'm 40 & have never had one!

Plenty of good safe old(er) cars out there. ZT someone already mentioned, 5 series E39?

[vit4]

Wipe the card, get a cheap shed Just because it's a shed doesn't mean it'll be unsafe or even a bad car; as has already been mentioned, the Volvo V40 is safe (4* NCAP), reliable, comfortable etc. Good ones can easily be had for a grand

For example:
http://www.autotrader.co.uk/classified/advert/2012...

£795


The other one that springs to mind is a Passat; again safe and reliable.

http://www.autotrader.co.uk/classified/advert/2012...

£849

[Bridgewaterfalls]

Dave Hedgehog said:

credit cards are superb, I earnt £350 last year from using mine in cashback and it boosts your credit rating

just dont ever borrow on one unless its a real emergency or a 0% deal

make your card work for you

Dave speaks the truth. They are a fantastic tool, be must used carefully. I too use cashbaack, all my expenses go via one. This means my cash earns me (pitiful) interest for a month, and I get cash back. I use a separate card for all motoring expenses for ease of accounting.

Saved me £2k+ when a bed company (iron bedsteds )went bust, mastercard had to chase them, rather than me trying and failing to do it.

[Dave Hedgehog]

Bridgewaterfalls said:

Dave Hedgehog said:

credit cards are superb, I earnt £350 last year from using mine in cashback and it boosts your credit rating

just dont ever borrow on one unless its a real emergency or a 0% deal

make your card work for you

Dave speaks the truth. They are a fantastic tool, be must used carefully. I too use cashbaack, all my expenses go via one. This means my cash earns me (pitiful) interest for a month, and I get cash back. I use a separate card for all motoring expenses for ease of accounting.

Saved me £2k+ when a bed company (iron bedsteds )went bust, mastercard had to chase them, rather than me trying and failing to do it.

oh yeah forgot about the superb section 75 protection for anything over £100 as well

http://www.moneysavingexpert.com/shopping/section7...

[Evo]

Buy a banger, clear the card, economic times are not good so if you're in the position of clearing if off then I'd definately do that first. You'll feel much better for it.

We've just done something similar as i do 100 miles a day commute so the wife has our 2012 E Class and I got an old Megane Convertible for £850 to stick miles on.

[kambites]

You can get a perfectly respectable car for ~£1000 these days.

Credit cards are fine and useful things, but personally I'd never use one to spend money that I don't have.

[rossub]

pay the current card off.

Sign up for an interest free balance transfer credit card. Buy a car using current credit card (if possible) and then transfer the balance to interest free card. Pay off sensibly.

Bought my last 2 cars this way and paid no more than £100-200 in interest both times, being the transfer fees.