Help with Credit Cards - Should I balance transfer?

veunson

Hi,

I'm a long time reader of this site but have never posted before.

I am after a bit of advice as I am not sure what to do.

I have 3 credit cards:

1. Egg - currently zero balance with a £7,700 limit. Have just been offered the 'anniversary offer' - which is 0% interest until 1 June 2010 on balances transferred before 31st Jan (2.5% transfer fee).

2. Barclaycard - currently approx. £3,500 balance. Am paying interest of around £24 per month on this. Monthly minimum repayment is around £80.

3. Virgin - currently approx. £7,500 balance. I have a 0% interest deal on this amount till March 2010. Monthly minimum repayment is £25.

I'm trying to work out which, if either, card I should transfer to the anniversary offer. Obviously I want the most cost effective route. I will not be able to pay any of these debts of during the life of the anniversary offer - will probably be able to pay about £200 towards these debts each month (spread however is most effective).

Would be very grateful for any advice and tips to work this out.

Thanks in advance.

Tixy

What is the standard egg APR? (after 1 June 2010)? What is the barclaycard APR?

If you move the barclaycard balance (at a cost £87.50) you would save 4months at around £24 so £96. It would seem its only worth it if the egg rate is lower than barclaycard going forward.

Or you could ask for a better offer, say 0% until 31 Jan 2011? Never hurts to ask.

CannyJock

veunson wrote: »

1. Egg / 0 / £7,700 / 0% until 1 June 2010(2.5% transfer fee).
2. Barclaycard / £3,500 / limit ? / 8.3% APR?
3. Virgin / £7,500 / limit ? / 0% till March 2010

Barclaycard interest = 24 per month = 288 per year = 8.3% of £3500

0% till June isn't great, but can still be used.

I would do this:
1. Balance transfer to Barclaycard however much you need to clear the balance in full (remember there's an extra month's interest you should add onto the amount you transfer)
2. Ask Egg to then transfer the "maximum" they can after the 1st transfer to your Virgin card - reason for doing this is Virgin are known to hike rates up and March isn't far away.
3. Once you get a nil balance statement from Barclaycard, hold onto it till March and with any luck you'll be able to ask for an existing customer life of balance transfer @ 6.9% to clear the Virgin card in full before you're hit with their hefty interest increase. Depending on your credit limit might even be worth transferring some of the Egg debt onto this.
4. If you manage to shift the full Virgin balance, it might be worth keeping the Virgin card in the hope of a repeat offer in June once the Egg offer ends.

On the £200 make the minimum payments on the lowest APR debts and pay the rest to the highest APR debt.

veunson

Thanks for the advice, i'm not sure about the APR's I will check and do as suggested.