To transfer or not to transfer?

kazzadred

Hi everyone

I am on an income of £15K per year and have a few credit cards, have had more in the past and never missed a payment. I have currently got an Abbey Zero which I got to transfer an outstanding balance onto (a 0% offer from HSBC was ending). However, they only gave me a credit limit of £1K and only allowed me to transfer half that on to the new card. I am left with a balance of £3k still on the HSBC card and a 15.9% interest rate. I have got 2 other cards which I use for everyday spending and pay the balance off in full every month to get cashback and cheaper diesel. They don't have any balance transfer offers on at the moment so I'd be looking at getting another card to get the balance transfer offer.

My question is: is it worth getting a few more credit cards and spreading my £3k balance over them and paying the 3% fee on each one or just paying it all off the HSBC card at 15.9%? I know it looks obvious written down but I am not sure how the interest is applied.

THanks
K :-)

Ritchie74

In theory you would be better spreading your debt over multiple 0% cards. Assume you had 3 cards each with a 1k limit, 3 x 3%(£1000) would cost you no mare than had you got a £3k limit on the one card (ie £90 in total).
However, I have only considered the cost here. You also need to bear in mind the impact on your credit report. Multiple searches (cc applications) in a short time period are detrimental and make your applications more likely to be declined.
I would move what you can onto the abbey, make only minimum payments whilst paying off as much as you can off the HSBC, then apply for another 0% BT card in say 3 months.

Ritchie74

Apologies, just re-read... you have moved £500 and still have £3000 left (not moved £1000 and £2000 left as my calculations above implied).
However same principle applies, wait a few months before applying for another CC and pay as much as you can off your interest bearing account in the interim