Question about transfers of debt - Light in tunnel appearing?

bluezone

Morning peeps,

I applied for an AMEX nectar card and cant believe it but they have accepted me for a card and they have given me a whopping £7,300 limit. I know I have got myself into trouble with cards but they have offered me 5.9% blance transfer for the life of the balance. So i'm thinking of transfering some debt from my other cards onto this one for the lower apr to save money on interest so that when I make payments to it I am not going to pay so much in interest.

I am only going to swap from my cards and not hubby's cos I thought concentrate on mine first then his. - sounds selfish i know but its easier for me


Here are the amounts on the cards that are in my name:

BC Gold Visa £6605.80
BC Mastercard £6061.85
BC Gold Visa (2) £5176.65
Tesco visa £8400.00
Capital One Visa £ 900.00

I was thinking of using the new limit £7300 the following way:
Clear Capital one (£900), some form tesco (£2400), some from BC Golod Visa 2 (£2000).

This would still leave me with £2000 credit on AMEX but would also lower my apr to 5.9% on £5300 saving me heaps in interest

What do you reckon?

wigginsmum

What's the APR on the various cards? I'd shove the highest onto Amex so you use up all the credit (allowing a spec for interest payable each month) and close any cards you clear, or arrange to have the credit limits dramatically lowered as they're paid back. Don't leave yourself a loophole on Amex to get even further into debt. Then concentrate on paying back the card with the next highest APR. Frankly any Nectar points you earn by spending on Amex are going to be tiny peanuts compared to the interest you're paying on your outstanding debts, so forget about the Nectar side for now.

Jules

bluezone

The apr's on the other cards are approx 17 - 19.something %. As soon as I pay the Capital one card off I'm going to cut it up and send it back.

Yes you are right, rather than leaving £2000 on the AMEX card I will transfer another £1000 from Tesco or completely clear the BC Gold Visa 2 card, cut that up and send it back. Not quite sure whether or not to completely clear 2 cards or clear 1 and shave some balance off the others?

Not too worried about the nectar side for now as I have not had a nectar card for years and suddenly got a statement in my email suggesting the AMEX card. I have checked my nectar balance and I have £125 of points which I aim to use in Argos or Sainsbury's

wigginsmum

It's a toss-up between which card has the absolute highest APR, or clearing 2 with lower APRs and getting that psychological boost. In your situation I'd probably clear Cap One, clear one of the first two, and shave some off one of the others. So you'd have 2 clear and 1 lower than before, and have a lower 'for life' rate on the Amex. But you would end up paying more than interest than if you did it strictly in highest-APR order, so it's up to you.

Jules

Tondella

Bluezone, we had to shuffle our credit card debts from APRs of 14-15% and found that, once one high APR card was cleared, you could go back to them, and ask them what their best life of balance offer for existing customers was. Worth a punt, specially since you can just cancel the card if you don't get a deal.

We did this with Lloyds, we had a really high credit limit on this card, £14k, and it was maxed out at 15.9% APR. We shifted it onto other cards and then approached Lloyds and haggled them down to a 6.9% LOB offer. So we cut 9% APR without having a credit card application search on our credit record. Martin's got a table of existing balance transfer offers in his credit card shuffle article so you know what sort of APR to aim for. You might be able to transfer some more debt down to a lower APR using this method - good luck!

bluezone

Cheers for this I will wait until the balance is off the card for a month say and then try this. Sounds like a good idea

Me_Myself_2

I'm sure others have already said it, but once you have transferred your balance to a LOB card, you must NEVER use it for anything at all.

If you did you would be paying the cheap rate LOB first while any new spend would be building up at the higher rate of interest every month.

That's why you should not leave the £2000 'spare' on it as you might be tempted to use it and, of course, your other debts are at a higher rate of interest.

Mery Christmas

:xmassign: :xmastree: :xmassign: