Balance Transfer fees

jay78

I know people thing stoozing is less worth it with these uncapped fee's. However if I was in a position to be balance transferring about the place I justify like this. 9 months 0% interest free actually means 8 months interest free and so on. It's still got be better that keeping your debt on a card with 15% interest rate.

Milarky

It will always be 'worth it' so long as the return available in the next month, net of tax, is greater than the next month's interest on the outstanding amount. Are you saying the month on the end (from 8 to 9) of a promotion period is discountable as the normal interest-free period on purchases or are you making an indirect reference to something else - the average balance being about 10 percent less than the start - or the time it take to pay a smallish fee on a large balance?

And with an existing debt to service you don't need to stooze, strictly speaking. Get a life of balance rate instead. This makes s bigger difference to your position over the longer term if compared with a card that goes to 15% after 9 months at 0% - on which the saving is only temporary.

Mercuryrising

A 2% BT fee onto a 0% card is generally worth 2 months or so interest on a highish APR (15% say) Ccard so it's definitely worth it, especially if the 0% period is long.

The best one out there seems to be the Capital One 15 month at 0% but several people on this forum find it difficult to get it.

Milarky

Mercuryrising wrote:

A 2% BT fee onto a 0% card is generally worth 2 months or so interest on a highish APR (15% say) Ccard so it's definitely worth it, especially if the 0% period is long.

Didn't think of looking at it that way - you're (both) correct - even if you get this type of card once it improves your situation by ('X-2' months at 0% compared to '15%'). How long does it take for a 'LOB' (say at a typical 40% of the standard rate?) card to do better that that though? At a '60% per month' saving that would be after 'X-2' times 10/6 would it not?

eg Standard rate of 15% but LOB rate (no fee, as they aren't common yet) of 6% (15% x 40%). Compare with 0% for (let's be generous) 12 months with 2.5pc uncapped fee. 15% is actually 1.25pc per month and therefore takes two months to match the fee at 2.5pc

Therefore: [12 months - 2 months] x [10/6] = 16.5 months

What about 9 months at 0% with 2% fee capped @ £50 borrowing £5K?

Here the fee is only 1pc of amount borrowed and that takes 0.8 months to clear.

Therefore: [9 months - 0.8 months] x [10/6] = 12 months!

So following the suggestion of jay78, if you could get a 9-monther about every 12 months you are on par with a LOB. If you get one more successfully - every 9 months you are doing better still.