Advice Needed - What will my new minimum payments be??

Littlemiss-lotsofdebt

Morning everyone

I've currently got a balance of £4100.00 with Virgin at 13.9%, and was accepted yesterday for a Guide Dogs for the Blind 0% on balance transfers for 9 months card but the credit limit offered was £2800.00, instead of the £4100.00 I wanted.

I'm going to balance transfer £2500.00 from Virgin onto the 0% card anyway(which if my maths is right, is the allowed 90% of the credit limit). This then leaves me with £1600.00 on the Virgin card.

Can anyone tell me what my new minimum payments are likely to be? At the moment, I am paying Virgin approx. £50.00 (minium payment on £4100.00 balance).

Thanks very much - maths is not my strong point!!!!

mountainofdebt

from what I can see you have to pay back 2.25% of the balance each month so at £1600 you will be paying back £36 per month.

What I would do if you can afford to pay back more then I would throw this extra amount at the virgin card, or alternatively keep paying £36 each month instead of 2.25% of the reducing balance.

Littlemiss-lotsofdebt

Thanks MOD.....now I am confused lol As the new card states 2% or £5.00 whichever is greater, of the minimum balance must be paid back, does this mean I will have to pay them £50.00 a month?? and Virgin £36.00?

If thats the case, then am I gaining anything?

grumbler

Yes, 2% figure for charity cards is correct. Minimum payment on £2.5K is £50.
Minimum payment on Virgin £1.6K is 2.25%, i.e. £36.

Danger! Avoid Minimum Repayments (this refers to your Virgin card that is not 0%).

I've currently got a balance of £4100.00 with Virgin at 13.9% ... At the moment, I am paying Virgin approx. £50.00 (minium payment on £4100.00 balance).

£4100*2.25%=£92.25 If your 0% on Virgin was over, you couldn't pay just £50 ...

mountainofdebt

Littlemiss-lotsofdebt wrote:

If thats the case, then am I gaining anything?

well you're not paying interest on £2500 which you would be if you kept it all with Virgin!

Littlemiss-lotsofdebt

I must admit Grumbler, I am now!

I've logged into my Virgin account and my last payment with PPI was £77.55, my next payment (since I cancelled the PPI) is £51.77, due to be collected by DD on 30/04/06.

I'm getting the same calculation as you though Grumbler, that my minimum payments should be £92.25 - but I've had the Virgin card for about 2 years and they've never been this high?

Any idea's?? I spoke to them recently and they said my APR was 13.9% and wouldn't lower it.

mountainofdebt

is that your PPI was forming the majority of your previous payments and that the actual minimum payment off the capital was soemwhere in the region of £5 (!!!!!)

Have a look and see if the minimum payments equate to the PPI charged in that month and £5.

I can only guess that someone somewhere got theire wires crossed and this has affected your monthly payments.........about a year ago I had to have a replacement card from another compnay as I had mislaid my card and ended up having 9 months at 0%.....very nice until they noticed it -although luckly they didn't charge me the back interest!

grumbler

I cannot explain why your payments were so low - call Virgin and ask. However, I want to draw you attention again (see the link in my post above) that such low payments are very dangerous. 13.9%APR is about 1.09% per month. And £51.77 is about 1.25% of £4100, i.e. you repaid only about 0.15% of the debt every month. You paid interest and almost did not repay the debt. If you use http://www.whatsthecost.com/creditCard.aspx you can see that in this case it would take you more than a century:eek: to repay the £4.1K debt and would cost you more than £40K:eek: in interest...

Littlemiss-lotsofdebt

Thanks Grumbler, I'm hoping that I have done my homework and am snowballing correctly. I will have an extra £80.00 per month come July which I can throw at my next highest APR - Virgin, and then another £100.00 (payrise from September).

Do you think it is worth me taking the Charity Card to cover the £2500, pay the minimum on this and Virgin, until July then throw the extra £80 at Virgin? I'm still pretty much a novice, so please bear with me.

mountainofdebt

Littlemiss-lotsofdebt wrote:

Thanks Grumbler, I'm hoping that I have done my homework and am snowballing correctly. I will have an extra £80.00 per month come July which I can throw at my next highest APR - Virgin, and then another £100.00 (payrise from September).

Do you think it is worth me taking the Charity Card to cover the £2500, pay the minimum on this and Virgin, until July then throw the extra £80 at Virgin? I'm still pretty much a novice, so please bear with me.

YES!

Ifyou read Martin's articeeven he says that to turn down a card at 0% jst because they wont giv eyou the limit you want is to cut your nose off to spite your face.....not only will your Virgin debt be at a higher rate than 0%, you have a credit search aginst your name now.
Throw every spare penny at the Virgin debt until cleared and then at your 0% card to clear the debt the most cheapest way possible.

Littlemiss-lotsofdebt

Thank you - sorry for exasperating you, but I guess I'm still a little nervous about moving debt around.

Thanks again LMLOD xxx