Credit card question - what do I do?!

pollypig

Hi all

I have £4,000 on credit cards. Last week, I called to cancel my Virgin card and was offered 6 months at 0% on balance transfer so transferred £1500 from a platinum barclaycard (was at 17.9%) and £2500 from an egg card (16.9%), there was a 2% fee but I figured that was cheaper than paying interest over next few months?

The very next day, I got a letter from Barclaycard offering me a 0% balance transfer offer onto my existing card until March 2007 or 6.9% on the life of the balance. It is also my Egg anniversary next month when, again, I will have the option of transferring the balance at 0% for five months.

I do plan to pay this £4,000 in the next 6 months but don't want to get caught in a situation where I don't manage to pay it all off and my Virgin card reverts to 24.9%...

what do I do? keep everything where it is? transfer some to barclaycard then some to egg? I'm wary of transferring too many times as I don't want to keep paying 2% in fees...

help!

CLAPTON

you have already transferred 4,000 (1500 and 2500) to Virgin paying 2% BT fee but now on a 0% card.
you hope to pay off all that amount in 6 months?

i would now do nothing, there is no point in paying more 2% fees. at worst if you can't completely clear the debt at the end of the six months there will only be a small amount left so you wont be paying much interest anyway. At that time you can of course look for another 0% card but hopefully you wont need it...well done.

pollypig

thanks for your response Clapton, that's what I thought... so I will go ahead and close my Barclaycard as I first planned to do - and in 6 months, as you say, I will be able to look for another card if I need it (REALLY hoping I don't... throwing all spare cash at it!)... should I keep the Egg card open for future anniversary offers or close that too? That would leave me with my Virgin card, which I plan to close as soon as the £4000 is paid and a Halifax One card that is only used for work expenses and paid off in full each month... when my credit score improves (too many failed applications sent it shooting down!) I'm going to shop around for the best cashback card for my work expenses... just not sure how many cards I should have... is one enough to show that I can manage credit? I don't yet have a mortgage and will one day like one so want my credit score to be as good as possible for when that happens...

CLAPTON

the oft repeated received wisdom, it that you should close unused credit cards because they adversely affect your credit rating. personally i doubt that 3/4/5 cards will do any harm credit rating wise. In practice i always carry two cards as i've had a card declined on a few occasions (no apparent reason..probaby a computer fault) but as i never carry much cash, a card declined can be very inconvenient.
Hopefully you wont be using the cards for long term credit so a cash back card makes sense especially if you run up substantial expenses at work...i would check Martins Credit card views when you feel its the right time to apply although at the moment the EGG Money seems to be a favourite...i'm would assume (but dont know) that already having an EGG card would help you get the egg money card.

pollypig

Thanks Clapton - really great advice... as I say, I need to hold off a few months before applying for a cashback card as I know I'd get declined at the moment but will definitely be checking Martin's articles... I tend to spend about £1000 a month on work expenses so it should earn me some nice money! thanks again for the replies - much appreciated!