Credit Card Help

gotenks1321

Evening all,

Just after some advice on where to go with 2 credit cards I have and the best way to pay them off quickest/less interest.

Current situation is:

Halifax: £3,900 paying ?? interest each month, paying off £100 per month.
Barclaycard: £2,000 interest free balance transfer about to run out, £5,000 limit and received some new balance transfer cheques through the post interest free until March 2010.

Now I know it's only 6 months but I was thinking of transferring what I can from the Halifax card over to the Barclaycard and only be paying interest on what is remaining on the Halifax card, clear that and then only have the payment on the Barclaycard.

How does that sound to you guys? I have tried getting another card but a messy split from my ex, moving house and having hidden bills have really screwed my credit history up so gotta make the best of what I've got.

Sorry for the essay but look forward to any great advice

LBG_worker

The problem you have is although your Barclaycard has given you an interest free offer if you still have a balance on the card you will pay interest on that balance but not on the balance you have transferred. The payments will go towards your cheapest rate first so your current balance on your barclaycard will be the last to be payed off. It also depends how quickly you are planning to pay it off? will it be a long time? Because the bigger the balance you wish to transfer the bigger the fee. If you are thinking of paying this off long term I would say your best option is to get a life of balance card usually you can get them for a reasonable interest rate which is locked in. You can try the 0% balance transfer game - all depends on how often you are willing to apply and change your credit card? I appreciate it is easier to pay one monthly payment off one credit card but to do this you have to have a big enough limit (as you have discovered)

In terms of making use of what you have you need to work out how much interest you will be paying on your halifax card over the next six months then work out how much you will be paying for the 2.5% fee you might find that you wont actually save that much. It might be worth giving barclaycard a ring and see if they can give you a better offer - see what they are offering to the shiny new customers? ask if they will match it? they have been known for this and if you don't ask you don't get!

gotenks1321

Thanks LBG worker

The fee on £3000 would be £75 unless I've worked that out wrong. 2.5% of the transfer.

The thing is, at the moment I am only paying interest on the Halifax card as the Barclaycard is still interest free. Once that has run out I will be paying interest on both the £3900 (slightly less after this months payment) and on the £2000. If I were to transfer £3000 from the Halifax card then that would leave me to pay interest on £700ish for that and then the £2000 previous transfer for the Barclaycard (hope that makes sense).

Am I correct in assuming that once the 6 months is up the same % of interest would be payable on the Barclaycard for both the transfers all in one? So then I would be paying interest on only the Barclaycard as the £700 from the Halifax card would be paid off. So what I'm getting at is, I should in theory be paying one set of interest on £5000 on the Barclaycard and that is it?

Should probably add that the Halifax interest is around £60 a month.

Halifax interest rate is 21.9% and the Barclaycard states 14.9% on purchases.

LBG_worker

£75 is correct - you will have to have a look at the small print after your balance transfer you will have what they refer to as a go to rate it is usually your normal APR rate but check just incase. As your one balance transfer rate with barclaycard is coming to an end interest will occur on that at your usual rate - no interest will occur on your 0% balance transfer for six months and then after that time you will have interest on both. After your interest free period you will have two transactions for interest on your statement so you can keep track. With halifax although you are charged interest you are paying off the balance. The danger with you transferring with barclaycard is you current balance with them will not have any payments going off it as the promotion you had has ended - your payments will all come off your 0%. As your barclaycard has a lower interest rate than your Halifax I would say transfer to Barclaycard. You never know once you have payed off your halifax and call to close they may offer you a nice balance transfer rate as Halifax do have a life of balance rate that they use for existing customers thinks its about 6.5% (used to work for them see for all my sins). hope that helps

gotenks1321

Thanks again

The letter from Barclaycard state that any outstanding balance after the 6 months will return to my usual purchase rate of 14.9% so it certainly seems like the way to go.

So basically:

• Transfer £3000 to Barclaycard interest free for 6 months
• Pay off remaining £700 from Halifax
• Pay £100 (current Halifax payment) plus £60 (current Barclaycard payment) off of the Barclaycard each month (more if I can afford it)
• After 6 months pay 14.9% on previous balance transfer of £2000 and 14.9% on the £3000 transfer instead of 14.9% on £2000 and 21.9% on £3000

LBG_worker

yep seems like you are making the best of what credit is available to you and the best thing is once you Halifax is cleared you just have one debt to pay off nice and simple. Don't forget when you are in a position to cancel your Halifax card to call them they may give you a better rate than Barclaycard! If they don't it is good to close and settle unused credit anyway. Plus it stops any temptation to spend spend spend and undo all of your hard work!