Virgin MBNA have removed the fixed payment option

YorkshireBoy

YorkshireBoy wrote: »

As I've asked previous posters though, why on earth are you overpaying a 0% deal? Why not pay the minimum £25 and save the rest in a high interest savings account and make a little interest out of them?

Just to expand on this...

My 'spending' card is a Halifax 15 month 0% product, which has recently cut it's minimum payment to 1% of the balance. Each month I spend £500 on shopping/petrol. At the end of the month I pay £5 of this spend to Halifax and put the other £495 in a high interest savings account. My average savings account balance in the first year is around £3,000 which makes me nearly £150 a year for doing...absolutely NOTHING!

Like I say, and whether you're stoozing or not, why pay it off early when a) you don't have to, and b) you can make some money for yourself?

charlie2517

Hi guys and gals,

Same thing with me - although I've just transferred the balance, funny though when I did it they said why are you doing that you're on 0%. I said really??? you've been charging me £25 pcm roughly on a 3.9% (I think it was) promo since June as agreed...the call handler didnt know what to say!!!

I have therefore read this thread with interest. The way I see it is it depends what you want the 0% for. I use mine so that I can pay off the capital of my debts quicker rather than paying interest to service loan/card, and I understand exactly what I'm doing and it works for me. Isnt that what it's all about?! For me I want at present to be debt free as soon as I can starting with paying off the credit cards. It's all well and good just paying the minimum and making some amounts in interest if your aim is not to clear debts but make money short term knowing that you'll be able to balance transfer it all to another card when the time comes. Right now as a first time home buyer who has a rather high card and is on a single income in a market where credit is as we all know "crunching", I think it somewhat short sighted to levy too much criticism at those of us who for now at least just want to pay our debts off quickly. Whilst I may not profit off the bank/lenders they certainly dont profit off me in interest added to my account and am happy with that.

One day I hope to only have one card and to draw the money out to invest as per the useful suggestion from Yorkshireboy. But I'd only want to do that if I took the money off the card and invested that too, otherwise for me it's a risky game. We all have different circumstances and it's about making things work for each of us.

x

calibrax

Markyt wrote: »

I'm overpaying on mine (or at least I was - ta, OP) and I know exactly what I'm doing, ta. I'm using the card in place of a car loan and paying it off over the same period I would have had a loan for, albeit without paying interest.

Yes, but you're not maximising your return. If you are paying, say, £100 a month for a year to clear the whole debt, and your minimum monthly payment is £50, then you should just pay the minimum, and put the other £50 into a high interest account. Then your last payment at the end of the year, draw out the money from the high interest account and clear the credit card in full. Then enjoy the interest you earned.

Of course, if you're happy the way you're doing it, don't want the extra hassle, and don't mind losing out on a few quid interest, then that's your call... it's your money after all!

charlie2517

Exactly - as I say bout making it work for each of us.

Markyt

The difference it makes in interest terms is negligible as far as savings go, tbh. I've already got enough locked in high interest savings accounts to pay off the cards if needs be, and the extra I'd get from drip feeding a savings account isn't really something I'm going to notice.

swoods

Thanks to everyone who replied, even those suggesting I don't know what I'm doing.

I'm not bothered by the "lost" interest in overpayments, it's hardly a life changing amount. Thanks for suggesting it anyway.

Back to the original point:
If it were a system wide change, why not just say so? I'd have happily accepted a "we changed our systems and can't support your payment" over the content of what was sent. If anyone can explain that, or if it's been covered elsewhere, please add the link.
I guess all I'm looking for is a little honesty and transparency in the industry!

Idiophreak

swoods wrote: »

I guess all I'm looking for is a little honesty and transparency in the industry!

:rotfl: :rotfl: :rotfl: :rotfl: :rotfl:

JimmyTheWig

YorkshireBoy wrote: »

As I've asked previous posters though, why on earth are you overpaying a 0% deal? Why not pay the minimum £25 and save the rest in a high interest savings account and make a little interest out of them?

For someone using a 0% deal to get help themselves out of debt, seeing that balance go down month after month must be very rewarding.
And that, in turn, must be a real incentive to pay more off the card, thus reducing their debt further rather than spending on stuff that they didn't really need in the first place.
This, then, would be much better for those people in the long run than an average return of 3% on the money they are overpaying.

For others, of course, the knowledge that they are "in effect" reducing their debt whilst _also_ earning interest on their money would be the incentive they need.

My point is that the incentive is worth more than the interest - so it is really important that people choose the best approach for them. (And I say this as a stoozer.)

Idiophreak

Have to say, I've never really thought about the way I'm paying my cards back (not like me, really) - they're all at 0%, but I pay whatever I can off them each month - sometimes overpaying by £700-800 - I guess this money would work a lot harder for me stuck in high interest til the end of term.

TBH though, as JTW says, it's much more motivating seeing the balances fall each month...I know it shouldn't make a difference, but it does - sure I'll end up debt free faster this way than if I tried stoozing along the way...

IWantToBeFree_2

I think the key thing to remember is that everyone is different and that what works for one person doesn't for others. All my outgoings (where possible) are put on my cashback credit card, this earns me around £20 a month from the cashback and the increased interest from my current account.

I also only pay the minimums off my cards when they are at 0% and stash the rest away in my offset savings account which saves me interest on my mortgage at 6.59%.

However, I would never say that that is the way you should do things because I know that some people don't necessarily have the displine to do it, I have so many spreadsheets which reconcile current accoun to cash back account, card balances to savings etc that I can sometimes lose sight of what I am trying to achieve....

I think one drawback I have found with MSE is that don't always look at individuals as just that, individuals.... the DFW forum tells me that I should cancel my sky, reduce my food budget and pay off my debts with my savings. This forum tells me I should stooze, the wedding forum says I should buy my dress from ebay etc etc... people just tend to churn out the same advice, whether its revelent to the individual or not! Saying that, I wouldn't trade this place for the world!