Clearing current credit card

phonicsgirl

Hi,

I'm trying to help my fiance to clear his credit card debt. I wrote a letter out for him to send to the credit card company, complaining about the amount of APR they were charging (20.9%). They also keep increasing his available credit also, even though he hasn't spent on the card in over a year so asked them to reduce this down. I mentioned about moving to the Virgin card, or the new barclaycard with 0% for 15-16mths.

They have come back with two options which I'm not sure is the best one to take, if any at all...so need some help!

1/ Reduce purchase interest rate to 14.9%
2/Reduce current purchase balance to 6.9% until paid off which incurs a 2.5% handling fee

Any ideas if any of these offers would suit us trying to clear his card. or would if be better to do a 0% balance transfer with the Virgin card?

Thanks!

scotdebs

i am by no means an expert on this stuff but if he hasnt spent on the card in over a yr changing the purchase rate isnt going to be much of a benefit to you - I would compare any transfer fee that Virgin may charge against the 2.5% his current card is quote also think realistically about how much he can put towards the debt each motnh that will give you an indication of how long it will take to pay off - if its longer than the )% rate that virgin will offer then you might be better to take option 2
HTH

CLAPTON

you haven't said how much he owes
or how much he pays each month

but option 2 seems much the better option

CannyJock

phonicsgirl wrote: »

2/Reduce current purchase balance to 6.9% until paid off which incurs a 2.5% handling fee

Sounds like a Barclaycard.

Depends how long it'll take him to pay it off, but from those two options, 6.9% LOB for a 2.5% fee is pretty good. Provided that he doesn't use the card for any "new" spending. Does he have another card he can use?

Yes, if successful and limit is sufficient, Virgin 0% for 16 months would be cheaper. BT fee with them is increasing to 5% from 1st March from letter I had a while back.

phonicsgirl

CannyJock, you're right.....it is a Barclaycard. I'm impressed at how you knew that!!
CLAPTON - he owes around £2500 (he was using to pay for finally getting his driving license among a few other things) His minimum payment amount is around £50, but he always pays £80+. I don't have any credit cards so I do pay towards it too from time to time if I can afford too.

He doesn't want to spend on it, he just wants to clear it off. He doesn't have any other cards so its just this one to clear off. Would reducing the available amount on the card make any difference? They keep increasing it, and is currently up to £9000!

Thanks for all you speedy replies so far!!!

CannyJock

phonicsgirl wrote: »

CannyJock, you're right.....it is a Barclaycard. I'm impressed at how you knew that!!
CLAPTON - he owes around £2500 (he was using to pay for finally getting his driving license among a few other things) His minimum payment amount is around £50, but he always pays £80+. I don't have any credit cards so I do pay towards it too from time to time if I can afford too.

He doesn't want to spend on it, he just wants to clear it off. He doesn't have any other cards so its just this one to clear off. Would reducing the available amount on the card make any difference? They keep increasing it, and is currently up to £9000!

Thanks for all you speedy replies so far!!!

If he won't be spending on it, then definitely the LOB. He wants to confirm that the "full balance" will be moved to 6.9% and that there aren't any cash advances or any other amounts that wouldn't be charged at 6.9%.

£2,500 @ 6.9% APR for a 2.5% fee being repaid at £80 per month will take 36 months to repay. Total repayable £2,830.75

Putting it onto a Virgin card for 16 months @ 0% for a 2.98% fee, then transferring it back to Barclaycard @ 6.9% for a 2.5% fee, and still paying it back at £80 per month will take 34 months. Total repayable £2,676.23