smallest introductary minimum payments??

Daytona_nev

Ok, this is my first post on this forum, so here goes.

I currently have 6k credit card debits which i'm jumping from one 0% interest rate to another every 6 months & paying off approx £300 per month in a bid to clear my debts. However, due to my penchant for expensive presents ( a new motorbike bought in april ), i also have an Egg loan @ 7.7% of which the outstanding balance is approx £7000 payable until oct 2008.

Back in April, i had a virgin ( MBNA ) card which came to the end of its introductary period. This card was very useful as they only asked for a £5 minimum payment for the first 6 months. ( Note under UK banking laws, the minimum payment on a credit card must at least cover any interest charges so under a 0% rate, there is no interest so the minimum payment can come down to as little as £5 irrespective of balance).

As i'm paying no interest on credit cards, i want to reduce my minimum payments as much as possible & put my £300 per month into additional payments to my Egg loan ( Egg loans are flexible & allow additional payments with no redemption ) in order to clear my loan which has 4 years to run under normal repayments, but i could clear in 2 & earlier with additional payments

Does anyone know of any other financial institutions with credit cards which have a similar minimum payment policy in the introductary period as MBNA, i.e. will allow payments of £5. This would be v useful & would fully maximise the amount of cash i could pile into my egg loan repayments.

johnllew

Does anyone know of any other financial institutions with credit cards which have a similar minimum payment policy in the introductary period as MBNA, i.e. will allow payments of £5.

I am not aware of any non-MBNA card that does this.

If the Egg loan is that flexible, can you not cover all of it by 0% cards? Beats paying 7.7% and will give you even more scope for reducing your debt quicker (as long as you don't buy any more presents).

Joe_Bloggs

@Daytona_nev
Welcome to the forum and congratulations on your first excellent post. I am giving MBNA a miss for a few more months so I am not up to date with all the details.

However it would probably worth your while to seek out another MBNA product if you want the same 0% £5 a month deal.
Allegedly you are allowed 5 MBNA accounts and can transfer credit limits and balances between them.
J_B.

Daytona_nev

The only problem with doing that is then i have approx 13k in credit card debts. This will seriously reduce my ability to apply for new cards. I'm unlikely to be given such a large credit limit on one card which means i'll have to apply for a handful of cards every 6-9 months to cover the debt which will have a detrimental effect on my credit score.

I have an Egg card too, this i use monthly for all my means then pay off in full at the end of each month. My anniversary date is November so at least i'll have 5 month @0% starting then ( around the time my current 0% rates expire ). Egg card has a low minimum payment rate of 2%, i was hoping to get lower if possible.

Daytona_nev

thanks for that.

5 mbna products?

but as i'm a current customer with a virgin card. Are they still going to offer me another card at 0% if i apply.

I thought banks wouldn't allow another 0% rate on a new & different card if you were already a customer?

Daytona_nev

i'm also aware that if i'm to use my egg card for transfers in November, i'll need to switch my everday spending to another card else i'll fall into the trap of only paying off the balance transfers ( as they're on the lower rate ) whilst still being charge interest on my purchases.

Joe_Bloggs

MBNA are behind many credit cards as well as providers in their own name. I don't have a list as I'm not applying for cards at the moment. You are better of a 'new' customer with a different fronting organisation than an old customer. You only get negotioting power with an old credit card firm when you can clear/transfer the balance on that card.

Have you tried increasing your egg card limit. I failed to get £1 increase.
J_B.

Daytona_nev

yeah, i'm fortunate with my egg card, i have an 8.5k limit. I increased this from 5k about 3 months ago. I've had the card since it was launched & have never missed a payment. I initially paid for the motorbike on the card knowing i would pay it off immediately cos i'd just had a loan through & paid into my current account. I did this to get the cashback before egg dropped it to 01% back in April. If you show the ability to clear thousands of pounds at a time, companies love it & will throw credit limit increases at you. It improves your behaviour score & classifies you as a v low risk customer ( low risk with respect to payment defaulting).

Weird thing, when i bought the bike, they put put it through on the POS & it authorised immediately, it didn't even initiate a 'hot' call through to the merchant. I could believe it. 6k authorised without so much as a bye or leave.

I've got ample limit on Egg to transfer my current credit card debt in november. I want to keep my Egg loan though as that's fixed & i can't run that debt up without reapplying.

bpyoung

Someone's probably already said this, but when you're using your egg card at 0%, you can just SBT back to full limit once you've paid your monthly payment, effectively reducing the minimum payment from 2% to 0%.

Daytona_nev

How does that work? Does that involve transferring back & forth between 2 cards?

Joe_Bloggs

Green Egg Anniversary transfers are free for the first month. Not for the whole five months of 0% interest.
J_B.