What can you BT and how long do you have from getting a new card ?

skibuddy

Hi,

My first post, so go easy.

A family member has approached me as they have racked up store card debt, shopping catalog debt and debt on their HSBC credit card (15.9% APR), totalling about £7K. My first advice was to reduce the interest as much as possible and therefore I have said I would look at 0% 15month cards etc as a first step solution. Their credit rating appears to be good from first inspection.

I know the HSBC credit card is easy to BT (limit permitting) but is it possible to BT the store card and shopping catalog debt, or should they put this onto the HSBC card before BT'ing that to the new 0% card ?

Also, if this isn't done as part of the application, how long after receiving the card do they have ? I was looking at the Capital One and Virgin cards. The Capital One card may be difficult due to creti scoring though.

Also, they have a fixed interest loan (5K loan, total payable ~7.5K) at 14.65%APR over 5 years. Can this also be BT'd if limit allows, or could someone suggest a better alternative to this ?

Any help appreciated

Thanks

CLAPTON

You don't say what their income is or why they have 14k worth of debts... but probably their first priority is to look at why they are in such debt and start to budget and live within their means and start repaying the debt rather than shifting it around.

Shifting debt to 0% deals is a good idea but they need to consider what happens at the end of the deal... in a years time it may be very difficult to get another and they then may be stuck on a very high APR CC.

If they are only paying minimal monthly payments then they may be better looking a low life of balance cards.

In general most CC don't let you BT from store cards or loans but the MBNA stable of CC (including Virgin) allow to be BT from your current a/c (a notional overdraft) so one they they can use that to pay off what they like.
But remember they haven't paid off the debt they have merely shifted it elsewhere...

skibuddy

The income is nearly 2.5k per month (combined with partner) after tax. Can you expand on how BT'ing from their current account would help. Their existing current account has next to nothing in it at the moment. I have just helped removed their overdraft, to appease the bank.

I have considered the low rate for life cards and will need to consider this for them.

Thanks

CLAPTON

If you have a current account with nothing in it and you BT from the current account to your CC ..say £5,000 then you have a debt of £5,000 on your CC and a positive balance in your cheque account of £5,000.

Then you simply write out cheques for whichever debts you wish to reduce/clear.

skibuddy

Thanks for the clarification. I understand now.

skibuddy

Apologies but do you know how long I would have after receiving a card to actually do the BT's, if I don't do this at application ?

NickX

skibuddy wrote: »

Apologies but do you know how long I would have after receiving a card to actually do the BT's, if I don't do this at application ?

This will depend on the Terms and Conditions of the particular promotion you have been given.

In some cases Balance Transfers must be made within a certain time period (e.g. 30 days or sometimes 3 months), other cases there is no such restriction.