FoxxDenPay the card off, but book the holiday
If you read anything about debt, the advice is usually the same: throw every spare pound at it, highest interest first, until it’s gone. And on paper, that’s right. Interest is money you get nothing for, so clearing expensive debt is usually the best return you’ll ever get.
But I tried living like that, and here’s the honest truth: it’s miserable. Months of no treats, no trips, nothing to look forward to, and eventually you crack. You book something on the card anyway, feel terrible about it, and you’re worse off than if you’d planned it.
Paying off debt is a marathon. Nobody runs a marathon without a drink on the way round.
Split it, on purpose
What works for me is deciding the split in advance. Most of my spare money goes to the card, because that’s where it does the most good. But a slice goes to a holiday fund, every pay day, without fail. Maybe it’s 70/30, maybe 80/20. The point is that both are happening, and both are planned.
The card still goes down every month. The holiday still happens. And because I’m not depriving myself, I actually stick with it.
Watch the 0% dates
One thing to be careful of: if you’re on a 0% balance transfer, the end date matters more than anything. If a split means the card won’t be cleared before the deal ends, you could end up paying interest on the whole lot, which wipes out the benefit. A couple of tips:
- Aim to pay it off 10 days early. Card payments can take a few days to clear, and you don’t want to miss the deadline by a weekend.
- Check the split against the date. If the card won’t be cleared in time, nudge more towards it for a while, then go back to your normal split afterwards.
- Have a plan for what happens next. If you can’t clear it all in time, find out what rate it goes to, and get ready to move what’s left to another 0% deal before the old one ends. Moving a balance usually comes with a fee and a credit check, so give yourself a few weeks. FoxxDen alerts you as each deal’s end date gets close, so it doesn’t sneak up on you.
FoxxDen does this check for you: split your goals however you like, and it’ll tell you if a card won’t be cleared before its deal ends, and what share would fix it.
Being good with money isn’t about never spending. It’s about choosing what you spend on, so the fun stuff doesn’t cost you twice.