Will a credit card comp ever extend a 0% balance transfer rather than lose you?

jp1181

I have an Egg credit card with about £400 to pay off. My balance transfer 0% period ends in about 2 weeks so will be switching, but was wondering if I ring Egg if they'll extend the 0% period rather than lose me as a customer? Has anyone ever tried this?

My main reason for this is I don't really want to apply again for a new credit card for a debt I'll have paid off in 5 months. I applied for a second credit card about 18months ago I was going to use for a holiday, and was refused it (can't remember the company). No idea why, I have a low mortgage on my flat (own 50% + of the flat) and my only other debt is student loan and bit of an overdraft (within limits). Don't want to rack up lots of card applications as I hear they damage your credit score. any thoughts anyone? Thanks

fozmcfc

You can ask, but by doing a transfer means they will get their £400 anyway, so can't see why they would.

UnderPressure

I shouldn't think so not over a paltry 400 quid anyhow, you are probably the sort of customer they would wave goodbye to without thinking twice, credit card companies like people who make them money not someone who after a few months of a 0% deal has not put themselves in a position where such a low amount has not been paid.

Is it really worth all the hassle and possible declines for the sake of 400 quid??

chattychappy

No never heard of it happening.

You wouldn't damage your rating by putting in a couple of applications. You may not save so much though. A transfer will typically cost you 3% on the whole balance transfered. If you leave it where it is you'll pay standard interest but on on a declining balance.

BT to another card:
Eg 3% of £400 = £12

Leave where it is - assume standard rate of 2% a month applies (26.8% APR) then you'd clear it over 5 months by making monthly payments of £84.86. Total interest would be £24.30 (depends a bit on timings of repayments).

So by doing the BT you would save £12.30. OK it's something, but this figure would be less if you could clear in less than 5 months or your APR is less than 26.8%.

If you let me know your standard interest rate then I'll run the numbers again.

jp1181

Thanks for all the info, the rates are:

current interest rate for purchases and balance transfers - 16.9% pa standard variable
current interest rate for cash advances - 22.9% pa standard variable

So I think I will definitely leave it where it is and get it paid off

Thanks all.

chattychappy

Then you could pay it off in 5 equal monthly instalments of about £83.05. So the total interest would be £15.25. You'd only be saving £3.25 by BTing elsewhere. So, yep, don't bother. (Some would!)

BLT_2

jimmiepreston wrote: »

I have an Egg credit card with about £400 to pay off. My balance transfer 0% period ends in about 2 weeks so will be switching, but was wondering if I ring Egg if they'll extend the 0% period rather than lose me as a customer? Has anyone ever tried this?

My main reason for this is I don't really want to apply again for a new credit card for a debt I'll have paid off in 5 months. I applied for a second credit card about 18months ago I was going to use for a holiday, and was refused it (can't remember the company). No idea why, I have a low mortgage on my flat (own 50% + of the flat) and my only other debt is student loan and bit of an overdraft (within limits). Don't want to rack up lots of card applications as I hear they damage your credit score. any thoughts anyone? Thanks

Of course they will, they love lending money to people at 0% interest until its paid off, you know it makes good business sense

jp1181

Thanks Chattychappy, that's the info I was looking for.

BLT - your insight has been invaluable, you may be good at not wasting money, but perhaps think about how much time you waste with your oh so precious pithy comments.

It's possible they would want to keep a customer in the hope they spend on the card above the balance transfer, which is why they offer the 0% in the first place I imagine.

chattychappy

It's perilous to reverse-engineer a business model from what you see as a customer. But... I reckon the whole point of BTs is that the banks hope that at the end of the deal you won't have the resources to pay it back so they'll get a few months' full interest. In the "old days" they were prepared to take quite a hit on the BT deal, hoping customers would stay with them for years afterwards and, as you say, put all their spend through.

But customers are savvy, so the deals are less good. People tart around. Long term business is less reliable. Regulation means people can opt out of standard interest rate hikes. Penalty charges are restricted and negative payment hierarchies are being abolished. So all that is left is the "dividend" of people running off the end of a promo deal.