If you’ve got some cash in the bank it may make sense to pay off your debt in one lump sum, rather than making monthly repayments and accruing interest. Typically, the interest on your credit card bill will be higher than any interest your savings are earning. For example, a £500 credit card bill at 18% interest will cost you £90 a year in interest. However, if you had that £500 in the bank earning 2% interest you’d only earn £10 a year. So you’d be £80 better off if you used the cash to pay off your bill.
If you really like the idea of having some accessible cash for an emergency, why not leave your savings as they are, but direct any money you would have added to them in the next few months towards paying off your plastic?
The only exception is if you can transfer your debt to an interest-free credit card. This gives you the entire interest-free period to pay off your bill and you can leave your savings in the bank earning interest. But it’s important to look into the full details, as you’ll usually incur a fee for doing so. And remember, it’s important to fully pay off any debt before the interest-free period ends or you could face paying interest on any remaining balance.