Balance transfers declined

Enzed22

Hello,

I have just been turned down for 0% balance transfers by RBS and Egg.

The Egg one literally took a split second to say no ... I wondered, do they automatically turn you down if you are self-employed, as I am?

I'm on the electoral roll and all payments are up to date on my three credit cards, don't think I've ever missed one (checked my credit file too and it showed all is fine with payments).

I owe £18,000 across three cards, all at high interest rates, and it costs about £430 per month just to make minimum payments (I'm trying to pay a little more each month off the one with the highest rate... good old MBNA at 34.9%).

From what I've read on here, I gather there is probably not a large enough differential between my debts and my income. Apart from increasing my income - currently £33,000 - is there anything I can do to move these high rate debts to somewhere cheaper? I have no family money to call on in the way of private loans, and no assets to sell, so neither of those roads is an option.

I can keep ploughing away with minimum payments, plus whatever extra I can find, until the end of time, but would obviously rather not ... so I'm just wondering if there is another path available to me at this stage?

Any advice appreciated. Thanks.

izools

Given you owe 18K on a 33K income it is going to be nigh on impossible to get a balance transfer.

Owing such a large percentage of your income, irrespective of how flawless your repayment record is or how stable your circumstances, the DTI (Debt to Income ratio) presents you as a high risk to lenders.

Concentrate on paying as much as you can toward debts as they are, and once you have reduced your DTI notably you should stand a better shot at a balance transfer.

Good luck

ironlady2022

The income you say you're on, does it ALL go through a bank account of some sort. If not, this may be where it is flawed, you say you're on X amount of income but you need to prove this, if it never goes through your debit account then your turnover probably does not warrant another credit card let alone a balance transfer. Plus as you are self employed, your income probably fluctuates a lot and this could be a major factor.

Enzed22

Thanks to both of you for your advice, I appreciate it.

Yes, all of the income is paid into a savings account in my name. I set aside a monthly allowance for tax, leave that in the savings account and shift the rest to my current account (which is the one I provide details of when applying for anything).

Income-wise, I've only included my regular clients, which are companies that I have either one or two-year contracts with. A bit more does come in from one-off jobs and the like, but I haven't counted that because that's the bit that fluctuates.

Looks like I'll just have to keep treading water for a while yet!

izools

It needs to come into your bank (current) account (all of it) for the bank to consider it as actual "income".

ironlady2022

Agree with izools. All income needs to go through a current account, that way the bank can see you can manage incomings and outgoings (eg standing orders and direct debits) as savings accounts do not offer the latter facility!

Enzed22

Thank you both for the good advice. I'll remedy that before having another go in 6-12 months. I wondered when making the application which account number I should have used ... mind you, as you say, the income-debt ratio is going to hold me back for a while yet anyway.
Meanwhile, I'm glad I can do at least a small something by making the changes you recommend. Thanks for taking the time to answer!

ironlady2022

Yes 18k is a big debt but in comparison to how much you earn, it's not that bad (I worked in a bank previously). What would hurt are your limits for example you owe 18k on one card but the limit is 25k, then they will look at limit to income ratio. When you look at it like this, then you'll see why you are being rejected.

YorkshireBoy

NatWest (so RBS too?) told me recently it's an automatic decline if you have available credit greater than 85% of your stated income (even if you 'owe' nothing!).

They wouldn't give me the used credit figure should you meet the available credit criterion.