Should I ditch the Virgin card?

samjl

Hi,

I've a Virgin credit card which comes to the end of its 0% intrest free deal this month. Now I've been really bad and only paid the minimum balance for the past year (I just finished uni so money has been really, really tight!). I've still got about £3.5k on the card and was wondering should I either:

Keep the card and pay the 16.9% APR but the minimum payment is still quite low (£25.00 unless it changes) so easier on my budget or
.....Transfer to another 0% card- I've tried getting another card and its only letting me have 0% credit for half my outstanding amount, which would mean still having some money on the virgin card....and paying a higher monthly payment aswell as the virgin repayment
....or spliting the amount onto two 0% cards (if I can get another one!), I'm not so keen on this option as it sounds like a logistical nightmare!

Obviously the best option would be to pay the lot off asap but thats not going to happen with my current budget!

Thanks!!

YorkshireBoy

Your Virgin minimum payment will increase to just over £50 once the 16.9% rate kicks in (based on interest + £5, with interest being £3,500 x 1.3097%).

MBNA cards are fairly unique in their very low minimum payments. If the card you've been accepted for charges 2% (or, worse, 3%) then your total monthly payments will increase significantly.

You should aim to have all your debt at 0%, but that may come at a price (which may not be affordable?). How much can you afford each month to service the debt?

samjl

YorkshireBoy wrote: »

Your Virgin minimum payment will increase to just over £50 once the 16.9% rate kicks in (based on interest + £5, with interest being £3,500 x 1.3097%).

MBNA cards are fairly unique in their very low minimum payments. If the card you've been accepted for charges 2% (or, worse, 3%) then your total monthly payments will increase significantly.

You should aim to have all your debt at 0%, but that may come at a price (which may not be affordable?). How much can you afford each month to service the debt?

oh really?? thats bad news....the card thats given me a credit limit of £1800 is says a 2.25% min payment per month...so that would leave £1700 on the virgin card and its higher repayments....or I have an old egg card I don't use anymore but the APR for that is 17.9 so I wasn't going to use that anyway...

I suppose if I forced myself to I could use every spare bit of cash I had to pay about £80ish a month at the most....

YorkshireBoy

Why not give Egg a call and see if they'll do you a promotional rate for some or all of your debt?

samjl

YorkshireBoy wrote: »

Why not give Egg a call and see if they'll do you a promotional rate for some or all of your debt?

annoyingly my anniversary offer was back in september....when I was still in the 0% virgin offer, I should have really been a bit more clued up about this back then!! Is it worth asking egg do you think?

anotherpaul_2

MBNA have a reputation for increasing the interest rate if you don't pay it off at the end of the promotion - I guess they figure they've got you and you'd have moved the debt if you could. My suspicion is that if you don't move it, you'll very quickly end up paying 2% per month in interest anyway. Plus, at £5 paid off the balance each month, it's going to take a LONG time to clear the balance.

Tom_Saunders

Can't you apply for a halifax 13 moth card ? you'd only have to pay 1% per month of your balance so £35 ? and it's 0% !!

Hope this helps.

samjl

I'm a bit cautious about applying for another card, I just got accepted for the natwest one (£1800 limit) and I'm waiting to hear back about an M&S one, which I think I might cancel if I'm accepted as the deal is only for 6 months...how many applications can you do without looking terrible on your credit report?!! I've not applied for anything else other than these cards for 15 months (to my knowledge!!)

YorkshireBoy

samjl wrote: »

I'm a bit cautious about applying for another card, I just got accepted for the natwest one (£1800 limit) and I'm waiting to hear back about an M&S one, which I think I might cancel if I'm accepted as the deal is only for 6 months...how many applications can you do without looking terrible on your credit report?!!

You're going about this in entirely the wrong way! Read this article before you really come unstuck...

http://www.moneysavingexpert.com/cards/bad-credit-rating

Why on earth didn't you see that the M&S card was only 6 months before you applied for it?...and why are you cancelling it before seeing what else you can do with it? By that I mean there's the option of a 10 month 0% BT for a 1% fee via the Sterling travellers cheque loophole.

Just out of interest, what did Egg say when you asked them for a deal?

samjl

YorkshireBoy wrote: »

You're going about this in entirely the wrong way! Read this article before you really come unstuck...

http://www.moneysavingexpert.com/cards/bad-credit-rating

Why on earth didn't you see that the M&S card was only 6 months before you applied for it?...and why are you cancelling it before seeing what else you can do with it? By that I mean there's the option of a 10 month 0% BT for a 1% fee via the Sterling travellers cheque loophole.

Just out of interest, what did Egg say when you asked them for a deal?

Haven't rung Egg yet but will do tomorrow....they close at 8pm:rolleyes:

I have no idea how I didn't spot the 6 months thing....a blonde moment perhaps!! I dont know about the BT 0% thing you mention, what does it mean? I haven't decided what to do with it but don't know if I've been accepted or not yet. Thanks for the info, thats decided it for me then, no more applications for a while!!

So the sensible thing would be to transfer £1800 to natwest (0% for 13 months) and then try and shift the other £1700 to either egg (should I be allowed a 0% rate) or the M&S card if I get approved even if it is only 6 months?

YorkshireBoy

samjl wrote: »

Haven't rung Egg yet but will do tomorrow....they close at 8pm:rolleyes:

Secure message?...yesterday? You have it in writing then.

I dont know about the BT 0% thing you mention, what does it mean?

I'll (or someone else will) explain if you're accepted AND with sufficient credit limit.

Thanks for the info, thats decided it for me then, no more applications for a while!!

You have a thread running now. Best to keep sense-checking your plans here with others.

So the sensible thing would be to transfer £1800 to natwest (0% for 13 months) and then try and shift the other £1700 to either egg (should I be allowed a 0% rate) or the M&S card if I get approved even if it is only 6 months?

Yes, but take the 10 month option if it's workable for you. Just out of interest, who is/are your current account provider(s)?