Need Balance Transfer Advice - 0% or 6.9% ?

Hi,

I recently opened a Barclaycard Credit Card with the intention of transferring approximately £3.3K (plus 1.9% handling fee) onto their advertised 0% for 13 months offer.

The balance is currently on Capital One and Halifax cards at approximately 23% APR.

When I activated the card I was told that I also have the option of a 6.9% fixed rate for the life of the debt. I am now not sure which is the best option.

In either event I expect that I will only be able to pay the minimum repayment each month of 2.25% so will still have a considerable balance in a year's time.

My first thought is that I should go with the 0% and move the balance when the 0% expires. This is fine except that my credit history is somewhat shaky (I was surprised to be accepted for this card), although I am trying hard to improve my credit ratings, and I am therefore concerned that I may not get accepted onto another 0% / low rate in a year's time. I also, of course, have no idea what the credit market will be like in 13 months.

My maths skills aren't great, but I reckon that at 0% the balance would have reduced by around £120 more than it would at 6.9% over the 13 months before reverting to the currently advertised rate of 16.9%(taking into account handling fees and assuming only minimum payments at 2.25% of balance).

So, what should I do? Should I take advantage of the 0% offer but risk the interest rate rising to at least 16.9% in a year's time, or should I go for the 6.9% but have the certaintly that this rate will exist for as long as I need it?

I would be very grateful for your thoughts.

Andy

Comments

  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I think you've analysed the situation very well indeed.

    One thing to bear in mind is that even if you do manage to secure a new 0% card every year you'll almost certainly pay a circa 3% fee for the privilege...so the 'cost' of going with the 6.9% APR LOB deal is only circa 4% per year going forward.

    So, the price of 'peace of mind' is very low?...and certainly a lot lower than any loan you could get if you chose to go that way instead.
  • Tixy
    Tixy Posts: 31,455 Forumite
    I'd go with the 6.9% LOB from the info you have given. As even if you are successful is keeping tarting to a new balance you will have to pay a BT fee each time or around 3% of the balance. It makes the 6.9% offer even cheaper if you factor in a couple of additional BT fees.
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • I have about 3k on life of balance cards.Nothing to stop you having a LOB card then using 0% deals for part of your LOB balance,then if you dont get accepted its not the end of the world.
    I have a deep burning indifference
  • Many thanks for your input - I agree that the 'life of balance' seems to be the way to go.

    Incidentally, and frustratingly, Barclaycard have not made a good start. When I was told about the 6.9% LOB offer I was told by their call centre representative that there was no transfer fee - their web site says differently and I've just payed 2.5%. Why can these companies never manage to provide accurate and professional customer services support?
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.2K Banking & Borrowing
  • 252.8K Reduce Debt & Boost Income
  • 453.2K Spending & Discounts
  • 243.1K Work, Benefits & Business
  • 597.5K Mortgages, Homes & Bills
  • 176.5K Life & Family
  • 256.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.