Balance transfer calculations - right thing to do?

thedino

I have been advised by Halifax that they are putting my interest rate up to 19.95% from 14.95% as of the 1st Feb - not happy about that!

I can cancel the card and pay off at my current APR however I also received a letter from Barclaycard who have advised I can perform a balance transfer to them with 0% APR of that balance until October 2010. I'm aware that the current BC balance wouldn't be touched by my repayments and sit there accruing interest.

I have created an excel sheet with some calculations on but before I go ahead with what I think is the correct course of action.......is there anyone who is good at figures, excel etc that wouldn't mind proofing my document to make sure its all correct?

I would be immensely grateful if someone would PM or post their email address for me to send it to!

Dean

CannyJock

Or we can help you answer it here where it might help others

Would need more info to verify the calcs though, like current BC balance, BC credit limit, BC APR%, Halifax balance, amount you can pay each month.

You can work the numbers to be close enough to make a decision (cards will do the calcs on a daily basis, but you can get close enough by assuming monthly interest%).

In OpenOffice you turn an APR into a monthly % by using

=nominal(19.5%;12)/12

Not got Excel infront of me, but formula will be something like

=nominal(19.5%,12)/12

(I'm sure someone can correct me )

The arithmetic between now and end October won't be that tricky to do - whether it's worth it comes down to the relative balances and %'s

thedino

Hi CannyJock

Info required to check whether it is worth transferring is;

BC Bal - £1,573
BC APR - 14.9%
BC Limit - £5,150
Pay - £45pm

Halifax Bal - £2,317
Halifax APR - 14.95% (19.95% from 01.02.10)
Halifax limit - £2,500
Pay - £55pm

Offer from BC is 0% apr until October 2010 with a 2.5% handling fee.

Thanks
Dean

CannyJock

Well, I reckon if you do nothing you'll be paying something like £168.69 interest on your Barclaycard and £330.32 on your Halifax card between now and end of October. Total of £499.01

If you transfer the £2317 to the Barclaycard, they'll charge you £57.93 as a BT fee and you'll pay £189.90 in interest between now and October. Total of £247.83

So on the face of it, the BT is the way to go

If after clearing the Halifax card they come up with a decent promotional 0% offer, you might even be able to transfer the full BC balance back to them as it gets closer to October

thedino

Thats the conclusion I came to aswell CJ.
Thanks