HELP - Advice Needed Please

Kandipandi

My friend came to me for advice on credit cards but i cut mine up years ago and have not got a clue. Hope you guys can help.
She has a great credit rating, still lives at home (saving for a house) and has the following cc's:
Egg - paid off.
Lloyds TSB Airmiles Duo CC Bal £4324.62 15.9% apr:eek:
Mint Card Bal £1200 5.9% apr (for life of balance)

This Lloyds one needs to be changed quickly, i know she can transf. to a 0% and keep an eye on the date and 'tart' to another, but how are the fees taken, do they add them to the balance or do you pay em upfront?
Also if she opts to play safe and go for life of balance low interest transfer anyone know who is doing good deals atm?
Any advice would be appreciated - her initial question to me was should i get a loan to pay these off? I thought not but you guys will know better. Thanks in advance.

Amy83

The fees are added to the transfered balance, you don't have to pay it upfront.

Have you looked at Martins Best Balance Transfers Article? (http://www.moneysavingexpert.com/cards/balance-transfer-credit-cards#cheapest ) That should help you with the Life of Balance trasfers

From all the info I've gleened from this website, I'd say a loan isn't the best way to go, they're usually fixed length and you'd be penalised for early settlement, and the rates on loans (in my experience) can't beat the LOB offered by credit cards. If she can then she's far better either shifting between the 0% offers, or going for the LOB as you've said

Kandipandi

Thanks i have just found that thread - it looks like the lowest int rate for a loan is much higher than the LOB %ages. Thanks for your reply - appreciate it.

Richard019

Amy83 wrote: »

The fees are added to the transfered balance, you don't have to pay it upfront.

That must depend on the card provider. When I've done them in the past it has been payment in the first month. Given that for that balance it's likely to be around £90 in fees it's not that massive a change anyway when you allow for the lack of interest being charged. If it's an MBNA card with their £5-25 minimum payment policy it'll probably work out as a cheaper payment even doing it upfront.

CannyJock

Richard019 wrote: »

That must depend on the card provider. When I've done them in the past it has been payment in the first month. Given that for that balance it's likely to be around £90 in fees it's not that massive a change anyway when you allow for the lack of interest being charged. If it's an MBNA card with their £5-25 minimum payment policy it'll probably work out as a cheaper payment even doing it upfront.

The MBNA minimum repayments of £ 25 are only from month 2 onwards, month 1 minimum repayment is about 3% of your balance after they've added their 2.98% fee to the amount transferred. Maximum amount you can transfer is 95% of your credit limit.

Still the best cards for generous credit limit IMHO

Richard019

CannyJock wrote: »

The MBNA minimum repayments of £ 25 are only from month 2 onwards, month 1 minimum repayment is about 3% of your balance after they've added their 2.98% fee to the amount transferred. Maximum amount you can transfer is 95% of your credit limit.

Still the best cards for generous credit limit IMHO

Even with the fee being paid in the first month I think the payment is lower.

My figures for their existing card might be wrong (as they are ball park), but this was my working:

Their existing card will be taking around 1.2% in interest plus 2.5% (is that typical) of the balance as a repayment, so 3.7% total. The first month MBNA payment would be 3% transfer fee plus a set amount. 0.7% of the balance in question will be just over £30 which is bigger than the maximum minimum payment on MBNA cards.

YorkshireBoy

Richard019 wrote: »

Their existing card will be taking around 1.2% in interest plus 2.5% (is that typical) of the balance as a repayment, so 3.7% total.

That's not how it works.

The interest is added to the balance at statement date. You then pay, say, 2.5% of this new balance.

ie assuming your previous statement balance was £10,000 (and no new transactions have been added) the new statement balance will be £10,000 x 1.012 = £10,120

2.5% of £10,120 is £253.00

Richard019

YorkshireBoy wrote: »

That's not how it works.

The interest is added to the balance at statement date. You then pay, say, 2.5% of this new balance.

ie assuming your previous statement balance was £10,000 (and no new transactions have been added) the new statement balance will be £10,000 x 1.012 = £10,120

2.5% of £10,120 is £253.00

:doh:Damn it, I know what I've done, I've had "x amount + interest + fees" in my head...

Right lets stop being daft now, that would make the first payment £35-55 more than the existing payments.

Kandipandi

Thanks guys i knew you would come up trumps for me :beer: , Ill pass this info on to my friend . x

Kandipandi

Today my friend signed up for the Virgin 0% till Dec 09 and got a £8k limit. She is delighted and passes on her thanks for all your help. Thanks again people.

Amy83

Wow, job well done then! :beer: