Maxed out a £500 NatWest Student account credit card - should I balance transfer?

synchro_2

I presume I'm now on some kind of 'Graduate' account now that I've graduated, but these are roughly the details of the credit card I have now: natwest.com/downloads/personal/cc_Student_summary.pdf

Is it worth me doing a balance transfer to another credit card? It's 'only' £500 the debt and I can most likely pay it off within a year.

Many many thanks! x

jd87

Well it depends on whether you want to save yourself the interest or not. Duh.

chattychappy

Yes, assuming you can get a decent BT deal. And/or consider a 0% on purchases deal (eg Tesco). That way you need only pay minimums whilst paying off your higher-interest debt. You have to do the maths to get the optimum combination. (Purchases don't attract a fee, BTs do.)

What to do also depends why you are maxed out and whether you are in control of your finances. If getting another credit card just facilitates increased spending, then you could end up worse off.

synchro_2

chattychappy wrote: »

Yes, assuming you can get a decent BT deal. And/or consider a 0% on purchases deal (eg Tesco). That way you need only pay minimums whilst paying off your higher-interest debt. You have to do the maths to get the optimum combination. (Purchases don't attract a fee, BTs do.)

What to do also depends why you are maxed out and whether you are in control of your finances. If getting another credit card just facilitates increased spending, then you could end up worse off.

Basically I wasn't working in 3rd year of university and put my last set of halls fees on the credit card. I've been working full-time (minimum wage, though) since September, so can realistically pay it off within a year. I haven't touched a credit card since! It just seems to me a worthwhile thing to do, to not have to pay the interest for that year if possible?

jay87

If its the £500 limit Student credit card you may find balance transfers aren't allowed, they weren't on mine a couple of months ago before I closed it. Might be worth checking the ts and cs

chattychappy

jay87 wrote: »

If its the £500 limit Student credit card you may find balance transfers aren't allowed, they weren't on mine a couple of months ago before I closed it. Might be worth checking the ts and cs

I read it that the OP had £500 on a student credit card but was looking to move the debt to a new card.

synchro_2

chattychappy wrote: »

I read it that the OP had £500 on a student credit card but was looking to move the debt to a new card.

Yep! Could there be a restriction on that?!

ironlady2022

Assuming you stop spending on it,if you pay it off within one year,


CURRENT SITUATION:

-18.9% APR based on £500 = £94.50 in interest but as you will be paying at least the minimum every month, the interest will be less than this.

NEW SITUATION:

If you do a balance transfer, based on the maximum balance transfer fee (3%) as an initial charge, the rest will be interest free.

So:
3% of £500 = £15 as an inital charge

You take the £500 figure and divide it into number of free months eg if it is 12 months at 0% then is is £500 / 12 = £41.66

Based on this theory, so long as the £41.66 is affordable then you should be saving £79.50 in interest.

Hope that helps!

synchro_2

mayling03 wrote: »

Assuming you stop spending on it,if you pay it off within one year,


CURRENT SITUATION:

-18.9% APR based on £500 = £94.50 in interest but as you will be paying at least the minimum every month, the interest will be less than this.

NEW SITUATION:

If you do a balance transfer, based on the maximum balance transfer fee (3%) as an initial charge, the rest will be interest free.

So:
3% of £500 = £15 as an inital charge

You take the £500 figure and divide it into number of free months eg if it is 12 months at 0% then is is £500 / 12 = £41.66

Based on this theory, so long as the £41.66 is affordable then you should be saving £79.50 in interest.

Hope that helps!

Thank you so much for that explanation!! And yes, I'm definitely not going to touch a credit card until I've paid this £500 off. Which is the best 0% card to go for then?

ironlady2022

The longer the 0% the harder it is to get. It's all dependant on your income. As (in my opinion) it is a small amount, I would go for a shoritsh 0% balance transfer eg 6 months? Then you don't waste the longer term ones. But you must understand it's how much you can afford, so £500 divide by 6 months = £83.33 pm. So long as you can afford this, you will be fine! Once 0% is over, yo can shop around again!

synchro_2

mayling03 wrote: »

The longer the 0% the harder it is to get. It's all dependant on your income. As (in my opinion) it is a small amount, I would go for a shoritsh 0% balance transfer eg 6 months? Then you don't waste the longer term ones. But you must understand it's how much you can afford, so £500 divide by 6 months = £83.33 pm. So long as you can afford this, you will be fine! Once 0% is over, yo can shop around again!

Cheers! But what do you mean by "save" - if I apply for the longer ones now, will they not let me reapply for them within a certain period? Or is it just that they likely will not accept me?