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# Complex snowballing on the credit cards

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Posts: 135 Forumite
I've checked the snowball sites and got the plan for Credit Card freedom to 43 months. Which I'm pretty impressed with if I must say.

However, I know that some of the credit cards do deals to existing customers and I'm trying to work out how to calculate a more complex snowballl.

Here's my delimer.

Two highest interest cards are:
Barclaycard 21.6% cr limit - £11,750 - Balance £10,306
HSBC 20.76% cr limit - £6,000 - Balance £5,800

Stage 1:
I've transfered £5,130 from the barclaycard to my Santander card for fixed interest rate of 10.56%.

Barclaycard 21.6% cr limit - £11,750 - Balance £5,176
HSBC 20.76% cr limit - £6,000 - Balance £5,800
Santander 10.56% cr limit - £10,500 - balance £10,130

Stage 2:
Now I can transfer up to £5,000 from the HSBC to the Barclaycard with a rate of 6.9% for the life of the balance + 2.5% fee. So it would then look like this:

Barclaycard 21.6% + 6.9% (avg 14.25) cr limit - £11,750 - Balance £10,301
HSBC 20.76% cr limit - £6,000 - Balance £800
Santander 10.56% cr limit - £10,500 - balance £10,130

This means I would then need to pay off the HSBC first and then move onto the barclaycard. What I'm thinking is this... Do I hold off on the Stage 2 transfer until I have paid off the remaining 21.6% balance and then transfer ?. How do you work out which one is the better option?
Present Day / 22nd May 2010
Credit Cards & Loans - £54,032.81 / £63,645.64
Mortgage - £160,794.47 / £166,894.02
Total Debt Paid Off so far = £15,712.38
Debt Free Date = Oct 2013 / Oct 2014

• Posts: 6,356 Forumite
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Ashamed wrote: »
This means I would then need to pay off the HSBC first and then move onto the barclaycard. What I'm thinking is this... Do I hold off on the Stage 2 transfer until I have paid off the remaining 21.6% balance and then transfer ?. How do you work out which one is the better option?
Have you see this discussion from yesterday? By the end of this year all credit card providers will have to allow customers to pay off the higher rates on balances first. That will certainly make it easier to juggle. Hopefully any pre-existing card balances will switch around - so you should not have to actively arrange for balances all at the lowest rates.
.....under construction.... COVID is a [discontinued] scam
• Posts: 3,838 Forumite
edited 2 June 2010 at 3:57PM
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How much are you able to pay each month to your total debts?

Is the 10.56% rate on the Santander card a LOB rate that you can continue to spend on? If it is, then be aware that you can still spend on the card up to the limit, increasing the lower rate balance, while taking the money that you would have spent and pay that to the highest rate balance.

To calculate what your total interest is over a period of time, you basically just need a spreadsheet and a few formula. Main one is to convert your APR into a monthly interest rate =NOMINAL(<APR%>,12)/12

The other thing is to bear in mind how the allocation of payment works if you have more than one rate making up the balance on the card (though as Milarky says, this is changing later this year).
"A child of five could understand this. Fetch me a child of five." - Groucho Marx
• Posts: 3,838 Forumite
edited 2 June 2010 at 5:17PM
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Assuming you make payments of £600 per month, the numbers work out like this (yellow payments are where you're making manual overpayments or to clear the balance on a card) :

This assumes the allocation of payment rules kicks in at the end of the year, someone from MBNA's let out that they'll be changing theirs in September.
"A child of five could understand this. Fetch me a child of five." - Groucho Marx
• Posts: 135 Forumite
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Thanks Milarky,
I didn't see that. There's so much info on this forum and so many post's it's hard to soak up even 10% of the knowledge per day . I'll have a read now.

Thanks CannyJock,
I can't see the picture at work due to the firewall but will check tonight when I get home. I'm not spending on any of the cards anymore and looking to pay at least £650 a month. Any overtime or ebay sales I get will also go straight onto the cards. The APR on the santander card is fixed at 10.56% for all transactions with the exception of cash withdrawals (i.e. balance transfers, fees, outstanding balances etc).
Present Day / 22nd May 2010
Credit Cards & Loans - £54,032.81 / £63,645.64
Mortgage - £160,794.47 / £166,894.02
Total Debt Paid Off so far = £15,712.38
Debt Free Date = Oct 2013 / Oct 2014
• Posts: 3,838 Forumite
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Ashamed wrote: »
Thanks Milarky,
I didn't see that. There's so much info on this forum and so many post's it's hard to soak up even 10% of the knowledge per day . I'll have a read now.

Thanks CannyJock,
I can't see the picture at work due to the firewall but will check tonight when I get home. I'm not spending on any of the cards anymore and looking to pay at least £650 a month. Any overtime or ebay sales I get will also go straight onto the cards. The APR on the santander card is fixed at 10.56% for all transactions with the exception of cash withdrawals (i.e. balance transfers, fees, outstanding balances etc).

Basic picture is to transfer as much as possible from HSBC to Barclaycard @ 6.9% rate.

Once the Barclaycard allocation of payments rules change, consider transferring as much as possible from Barclaycard to Santander, but only where it'll affect the balance @ 21.6%. If you really wanted to, you can do this every month after you make the minimum repayment on the Santander card to basically keep it maxed out

When doing the calcs for the Barclaycard, remember it's the minimum payment on the combined balance

When you've got more than one rate making up the balance on a card, remember which rate your payments will go against - in the example of the Barclaycard, there's no point making overpayments to the card when you'll be reducing the 6.9% balance, but once they adopt the new allocation of payment rules, it's the exact opposite.
"A child of five could understand this. Fetch me a child of five." - Groucho Marx
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