NEW: Got questions about energy? Put them to Gary and Andrew from MSE's Utilities team during our energy-themed 'Ask An Expert' event. Check back here from Tuesday 9 August, 12pm

Overdrafts Loans and Egg Money

Hi All,

Just wanted to check to makesure there are no flaws in my plan:-

I currently have an outstanding overdraft of £2000 and an outstanding loan of £2000 with Lloyds TSB.

I also have a Lloyds TSB airmiles Duo Credit Card with no outstanding balance and a credit limit of £6750.

They are currently offering me a 0% balance transfer on my credit card for 9 months with a 3% fee.

My plan is to open an egg money account and do a balance trasnfer of £4000 from my credit card to the egg money account. This would make my Egg Money account £4000 in credit?

I would then transfer the £4000 from the Egg Money account to my current accountand therefore pay off my overdraft and outstanding loan, saving a lot of money in interest by doing so.

I'd then obviously have to makesure I don't spend on the credit card and makesure I pay off the oustanding balance within the 9 months or transfer this to another 0% card.

Does anyone see any problems with me doing this? Thanks.

Replies

  • CannyJockCannyJock Forumite
    3.8K Posts
    Nope, no problems at all.

    Just double check the numbers that you're transferring through to make sure you're able to fully clear them plus any charges.

    The £2000 loan figure needs to be a settlement figure they've given you and not just what you think the outstanding balance would be based on number of payments remaining.
    "A child of five could understand this. Fetch me a child of five." - Groucho Marx
  • Lee85_2Lee85_2 Forumite
    7 Posts
    Thanks. But don't worry I have a settlement figure!
  • YorkshireBoyYorkshireBoy Forumite
    31.5K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Forumite
    For the same 3% fee you'd get 13/14/15* months 0% on money transfers by applying for the standard Egg card. That's if you think you'd get the limit required of course?

    Might work out cheaper in the long run?


    * The current offer is "until June 1st 2011", but the Egg card offers generally rollover on the first of the month. See what they have on offer tomorrow, 1st May.
  • Lee85_2Lee85_2 Forumite
    7 Posts
    Seems this won't be as easy as I first thought. Lloyds TSB state that a 3% balance transfer fee is charged and interest is charged on this fee. Which means I'll be paying interest on the transfer fee until the balance is repaid.

    I don't have sufficient credit limit on my other credit card! Doh.
  • CannyJockCannyJock Forumite
    3.8K Posts
    Lee85 wrote: »
    Seems this won't be as easy as I first thought. Lloyds TSB state that a 3% balance transfer fee is charged and interest is charged on this fee. Which means I'll be paying interest on the transfer fee until the balance is repaid.

    I don't have sufficient credit limit on my other credit card! Doh.

    3% fee on £4000 is £120.

    16.9% interest on £120 is £20.28.

    It was going to cost you £120 for the 9 months, £140 isn't much difference is it?
    "A child of five could understand this. Fetch me a child of five." - Groucho Marx
  • jamesdjamesd Forumite
    25.8K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Ask whether the fee is deducted before the BT. If it is, put the card in credit by the fee amount before you do the BT.
This discussion has been closed.
Latest MSE News and Guides

Homes, hornets & high heels

This week's MSE Forum highlights

MSE Forum

Kids eat for 'free' or £1 this summer

Little ones can enjoy hot meals for less

MSE Deals