Please some advice.

David_Mog

Hello,
I owe just over £2000 on my Sainsburys credit card (Typical 22.95% APR variable), the minimum payment is around the £50 mark which I always meet by direct debit.
I have been trying to apply for a low rate Simplicity card for the life of the balance without success and suddenly Sainsburys offer me a 5.94% p.a. deal (plus 3% fee).
I am totally in the dark with money terminology (APR and p.a.) etc...
Could you please advise me if this is a good deal, is there a hidden catch and should I go for it?
Yous Respectfully
Dave.

LJDavis

Well if you keep your current debt on the Sainsburys CC and pay off £50 a month; you will clear the balance in October 2015.

If you change to the Simplicity; your current debt will rise to £2060 and if you pay off £50 a month you will clear it by June 2013. Better, but still not great.

Other options are paying more than the minimum balance or trying to switch to a 0% (Virgin/Halifax etc) depending on credit limit.

LJDavis

What other debts do you have? As this could affect what you need to pay off first?

David_Mog

This is my only debt, I just need to pay less interest, and when I can, pay off larger amounts.
Thank you for helping so quickly.

Moggles_2

Presumably, this offer applies to new business.

It's not a bad deal, provided that you pay off/transfer the existing £2000 balance to another cc first, otherwise you would continue to pay 22.95% APR on those transactions.

However, it gets worse. The standard 22.95% rate is not fixed, it's variable. Sainsburys could decide to raise the rate again at any time :eek:

Do you have other credit cards besides Sainsburys?

Moggles_2

David_Mog wrote: »

This is my only debt, I just need to pay less interest and, when I can, pay off larger amounts.

Presumably you have a bank account, a regular income and you're on the electoral roll at your current address.

Have you considered applying for a 0% balance transfer card?

David_Mog

This is my only credit card.
Just thought it would be a good idea to have a long term low rate that would give me more of a chance to pay it off?
The deal is not for a new buisiness.
Thanks Dave.

Moggles_2

David_Mog wrote: »

The deal is not for a new business.

Agreed, I'll rephrase that.

The 5.94% fixed rate applies only to new transactions, unfortunately. Your existing £2000 balance would continue to be charged at your standard rate ie. 22.95% APR typical.

David_Mog

Would you say that my best option is to transfer to a new card with 0% for a year or so as LJ Davis said and pay it off that way, would the interest be smaller?

Moggles_2

David_Mog wrote: »

Would you say that my best option is to transfer to a new card with 0% for a year or so as LJ Davis said and pay it off that way, would the interest be smaller?

Presumably you have a bank account, a regular income and you're on the electoral roll at your current address. If so, I would definitely consider a new 0% BT card.

For tips to improve your chances of credit card acceptance, have a look at the *Credit Rating: how it works and how to improve it guide* especially Martin's *Manage and Improve your credit score* article

http://www.moneysavingexpert.com/banking/credit-rating-credit-score#improve

I would avoid Halifax at the mo as this belongs to the same stable as Sainsburys (HBOS).

To maximise the 0% period, 16 months is currently available to new customers from Virgin. There's a 2.98% transfer fee.

http://uk.virginmoney.com/credit-card-v3/

David_Mog

Yes I am in work with a bank account and on the electoral roll.
Thank you so much for your help!
Very kind of you!!
Cheers Dave.