Have I done the right thing?

Jamiedk

Hello everyone,

After looking at this website for quite some time, and listening to my mum repeatedly tell me how great you all are, I have finally taken the plunge and made some changes on the back of the advice given. The changes I have made are:

1. Contacted SKY TV and now have half price subscription.
2. Switched from British Gas to a cheaper provider.
3. Applied for an AMEX Credit Card so I can transfer a Natwest Credit Card balance

My query is this. Numbers 1 & 2 are pretty straight forward (SKY TV / British Gas) but have I done the right thing by applying for the recommended Amex Credit Card for a balance transfer? I have quite a hefty balance on my current Natwest Credit Card (approx 10k), and currently pay approximately £200.00 per month.

I’m sure you can tell that I am quite naive when it comes to all this but am I right in saying that transferring my Natwest balance over to the AMEX Credit Card will reduce my monthly payments and I will receive 4.9% for THE LIFE OF THE TRANSFERRED AMOUNT, as long I do not spend further on this card? So the main point of transferring this balance to AMEX is to reduce interest and reduce the amount we pay back on a monthly basis?

Thanks in advance for your help and guidance.

Jamie

Bokken_2

Welcome to MSE

That is correct LOB cards are just that .
BT balance Transfer the balance to the 4.9% Amex and make the payments each month and leave it alone.
You can complicate it by moving the balance later onto a 0% card and then you would pay no interest for that 0% offer period.
I don't think you will get a 10k limit with Amex.So you will probably have to BT some of your 10k to Amex and then apply for another card and transfer the rest of your 10k to it.
If they give you the credit limit your asking for then there isn't a problem.

grumbler

Jamiedk wrote:

...have I done the right thing by applying for the recommended Amex Credit Card for a balance transfer? I have quite a hefty balance on my current Natwest Credit Card (approx 10k), and currently pay approximately £200.00 per month. ... am I right in saying that transferring my Natwest balance over to the AMEX Credit Card will reduce my monthly payments and I will receive 4.9% for THE LIFE OF THE TRANSFERRED AMOUNT, as long I do not spend further on this card? So the main point of transferring this balance to AMEX is to reduce interest and reduce the amount we pay back on a monthly basis?

Yes, you have done the right thing, but ...

It is a big mistake to compare cards by monthly payments and to think that the main point of transferring is to reduce monthly payment. APR is the first thing to compare. Amex has low LOB interest rate, but minimum monthly payments are 3%. If you get £10K limit :rolleyes:, you will pay about £300 p.m. at the start - more than you pay now. However, only a small part of this amount is interest. The most of your minimum payment will go towards repayment of your debt. And this is good.

See also: Danger! Avoid Minimum Repayments

Jamiedk

Thanks for your wonderful advice but I am confused again. Putting yourself in my position, may I ask what you would do to sort out this problem? I am just about to re-mortgage, shall I apply for the additional 10k and start over again with a clean sheet?

grumbler

Jamiedk wrote:

I am confused again. Putting yourself in my position, may I ask what you would do to sort out this problem? I am just about to re-mortgage, shall I apply for the additional 10k and start over again with a clean sheet?

If it is OK for you to make £300 monthly payments, do what you planned. If you get Amex with £10K limit, transfer the balance and cancell Natwest card, otherwise having two cards with £10K limits could affect mortgage application. If you get lower limit, transfer part of the balance and ask Natwest to reduce your credit limit accordingly.