Slightly confused over BT's and charges

Chumana

Hi, I am fairly new to stoozing and have never done BT's before. I currently have a Lloyds cc which is 0% until July which I've been using for purchases and keeping the money I would have been paying back in a separate savings account.

I have also recently been accepted for both the Egg Money and Egg (green) credit card, although I only applied for the cc yesterday and was immediately accepted but won't know for a week or so what my credit limit will be. I'm hoping for around £3-4k as they offered me £2,200 on Egg Money and I'm hoping to do a BT to Lloyds, which currently stands just over £3k in debt (£4 k limit).

This is where I start to get a bit confused now as I'm not sure what to do next to avoid paying any interest/charges as it seems Egg are now charging 2.5% uncapped, so if I am able to BT £3k to Lloyds that will cost me £75.

Would I be better off pulling out my savings to clear Lloyds in July, which is currently earning me 5.25% or should I BT what I can from Egg cc to Egg Money and let it earn me 4% for a couple of months, then use some/all of this, depending what limit they give me, to pay off Lloyds?

Chumana

Forgot to add that the Egg cc is 0% until Feb 2007 if that makes any difference on whether it's worth paying the BT fees.

Voyager2002

I don't think your post gives all the information needed to do the calculation, and anyway is rather long and confusing. I would suggest that you read the article and some other posts to get a good idea of how to make your decision. At that point, if you can't do the sums, you should consider whether stoozing is really for you.

Chumana

I apologise if my post confuses, but having read all the articles Martin's published, plus read many threads here before posting my question, i am still rather confused myself!

I do agree however, that until I know the credit limit Egg will offer me on the credit card, it's difficult to make any proper calculations as to which method will be most beneficial to me.

I'll admit that applying for the Egg credit card was rather an impulse affair after receiving a leaflet with CDWOW purchase offering 0% BT until Feb '07, and I had originally planned waiting another month or so to see what was on offer to BT the Lloyds cc debt when the 0% on that runs out in July.

I don't want to get into stoozing to make mega bucks but I'd like to take as much advantage as possible over these 0% deals to keep my money working for me in savings accounts
rather than paying it back to the banks

Milarky

Chumana,

Egg Card (green) 0% for 9 months on BTs to any current account. This now costs 2.5% whatever the amount. The fee is also subject to standard rates of interest I believe (it is on anniversary offers of five months) and the repayments you must make reduce the amount outstanding somewhat. The effective 'apr' over 9 months (which was '0%' before fees) is now 3.62%

On that basis you can't really make any money 'stoozing' - merely 'break even'. A better use of the card is for its 0% on purchases ('slow stoozing') and just paying the minimum. That's only for the first six months, though. After 9 months the card can be used as a 'mule' provided that Egg does not 'offer' you any special rates (because special promotions also attract fees) and you make a short time balance transfer at 'standard' interest rates.

Egg Money is a better bet. Being a pseudo savings account they don't charge for balance transfers - just interest daily on any negative balances. It's a good cashback card too, but awkward to use. However you can't use it to transfer a balance from Lloyds because there is no 0% interest period on this.

If you were carrying a geniune debt you might consider it worthwhile using the Egg green as a balance transfer card and accept the rate of 3.5% as pretty good for 9 months. But your timing would be slightly out then - with 0% on purchases still on the Lloyds card until July.

Chumana

Milarky wrote:

If you were carrying a geniune debt you might consider it worthwhile using the Egg green as a balance transfer card and accept the rate of 3.5% as pretty good for 9 months. But your timing would be slightly out then - with 0% on purchases still on the Lloyds card until July.

Ahhhh, you understand my dilemma in that I CAN pay off the Lloyds card if necessary at the end of the 0% period but I had rather hoped I might be able to BT the debt to another 0% card and leave the savings account intact, but I think I've jumped the gun somewhat with the Egg card, thus now trying to find a way to utilise that in the most profitable way.

Am I right in thinking that I will still be charged the 2.5% BT fee even if I transfer as much of my credit limit as they allow me to Egg Money? And it's only transfers from a positive balance on Egg Money that are actually free?

I suppose if worst comes to worst I can always use the Egg card for 0% purchases, as I'm not far off my limit on the Lloyds card now anyway, then pay that off, or try to find a fee free BT card, and just continue to save my "spending money" as I have been doing the last 7mths!

I don't recall what the T&C's were for purchases, as it was the long 0% BT that attracted me initially, so will have to check that out first!

Chumana

Milarky wrote:

Chumana,

Egg Card (green) 0% for 9 months on BTs to any current account. This now costs 2.5% whatever the amount. The fee is also subject to standard rates of interest I believe ...

Just picked up on this after re-reading your post, so now I'm wondering if it's possible to pay off this fee immediately, thus incurring no interest charge, or are any payments first applied to the BT amount with the fee coming last on the list to be paid off?

YorkshireBoy

Chumana wrote:

Am I right in thinking that I will still be charged the 2.5% BT fee even if I transfer as much of my credit limit as they allow me to Egg Money? And it's only transfers from a positive balance on Egg Money that are actually free?

You can't transfer a balance from Egg Money to the Egg Card - but then again, why would you? Egg Money only pays 4% AER on credit balances. You can SBT from your current account to the Egg Card but, as Milarky says, can you make any (worthwhile) money from it with the 2.5% BT fee?