Debt Juggling Question using new M&S card

DontDoDebtKids

Hi all,

I know quite a few of you read my diary thread, thank you, but I'd like to pose a question to a wider audience:

Debts involved

I have an Egg Loan with an outstanding balance of £6659.42 at an interest rate of 7.9%. I am paying £139.75 a month towards this.

I have a Capital One credit card with an outstanding balance of £2042.28 currently at an interest rate of 0% but soon moving up to 15.9% I think. I am paying this card off as quickly as I can.

Current Plan

The current plan is to pay off Capital One, then move on to the Egg Loan.

I notice, however, that M&S are offering a 3.9% LOB or 0& 12m on Purchases card.

How can I use this to my advantage?

I am aware that the Egg Money card can be used to do a SBT with no fees. I don't, however, have one at the moment.

Option 1

Should I apply for a M&S card and an Egg card, transfer the imaginary balance of the Egg card to the M&S card at 3.9%, transfer the positive balance of the Egg card either to my bank account then to the loan or directly to the loan?

Problems: Need to apply for two new credit cards, will I be accepted?

Option 2

Should I spend on the M&S card, creating a 0% debt, and pay equivalent amounts into the Egg Loan to match the 0% debt with the decrease in Egg Loan?

Problem: Does this actually make any sense?

Option 3

Not using an Egg card, perhaps using my Capital One card, transfer an imaginary balance, once Capital One is paid off, to the M&S card then close the Capital One card and await a cheque for the positive balance with which to pay towards the Egg Loan.

coxj2901

Hi DDDK,

Can you apply for the M&S Card ( I applied for one yesterday) so you have this ready for when the Capital One Credit Card rate increases and in the meantime throw as much as possible at the Egg Loan (As this is your current highest interest accruing debt)

Once the Capital One Rate increases move this to the M&S Card (3.9%), cancel the Cap One Credit Card and continue to reduce the Egg Loan.

I'm sure your aware of snowballing to reduce your highest interest accruing debt.

Things to be aware of as you must under no circumstances when shifting debt either:

a) Borrow that "little bit extra" for treats etc.. like we've all done in the past
b) Not cancel the Capital One Credit Card.

The key is to learn from our mistakes and as long as there are no fees invloved in the balance transfer and a) and b) are avoided then it makes sense to do this.

It also keeps things fairly simple and would not adversley affect your credit rating by applying for too much credit when you already owe a large sum.

Rgds, John

newlywed

I was refused for the M&S card - details being sent in post.

On another thread I was told if you have credit search in the last month, then they refuse you. So in case that's right, if you are going to get two cards - make sure you get the M&S one first!!

frugglewump

I think you're overcomplicating things here. Why wait to transfer until the capital one is paid off? Time the M&S application so you can move the capital one balance over to 3.9% life of balance.

Unless you are sitting on a stooze pot to pay off capital one balance at the end of thew 0% period? If this is the case then your option 3 looks the best to me, but you have to be sure that capital 1 won't just return the positive balance to M&S

MascaraMinx

That's not true - I got offered one and I've had credit searches in the last couple of months.

DontDoDebtKids

I've not got a stooze pot

I didn't think of just moving the Capital One balance to the M&S card.

That would, in effect, re-prioritise my debt payments to pay the Egg Loan first.

Currently, I am chucking everything I can at the Capital One card.

Maybe, instead, I should get a M&S card and then change targets to the Egg Loan...

frugglewump

DontDoDebtKids wrote:

Maybe, instead, I should get a M&S card and then change targets to the Egg Loan...

Sounds sensible to me - after all getting that 2k down to 3.9% apr will be useful. Try the snowball calculator at https://www.whatsthecost.com to see the differences in moving balance from loan or card.

It's all a bit theoretical though until you apply as you don't know the credit limit.

FatJock

Guy's,

I applied for an M&S card yesterday. Not sure of the outcome yet but am I correct in thinking that the 3.9% LOB is available for the first 6 months when opening the card?

Cheers,
FatJock

southernscouser

newlywed wrote:

I was refused for the M&S card - details being sent in post.

Same with me! :doh:

savvykaz

Hi Fat Jock, yes you are correct - it is all balance transfers completed within 6 months of the card being opened and they are all fee-free!

savvykaz

To all you guys who have applied for the M&S card and been refused - are you aware that the card is actually issued by HSBC, so if you already have one of their cards then maybe this is why you can't get the M&S one.