Credit card repayment - help with maths required!

Clarie_2

Hi,
please could someone help me work out the best thing to do?

Currently I have:
£3444.31 debt on a Halifax card. Limit is £3800. Interest rate is 0% till 28th Feb, when it jumps to 17.9%

£1845.53 debt on barclayard. Limit is 3000. Interest rate 6.9% for life.

We also have 0 debt on another barclaycard. Limit £6350. Offer of 0% on balance transfers till Aug, then 6.9%.

And at the end of this month we will have about £2500 coming in to pay off some debt with.

As we've had to move a few times in the last couple of years our credit rating is low. I've been turned down for one 0% bt card, and don't want to keep trying - I'd rather shuffle the money around.

When the money comes in in Feb is it better to transfer the Halifax card and pay off my barclaycard? Or to pay off as much as I can of the halifax and transfer the rest?

Thanks!

Clarie

[Deleted User]

Pay off Halifax and transfer the rest. The 0% is just about over, so it's 6.9% plays 17.9%.

Going forward, pay minimum on Barclaycard, and as much as you can on Halifax.

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Edit - the above may be wrong, having just re-read the post. The other Barclaycard - that's 0% till August and then 6.9% afterwards - is that variable? And it is definitely 6.9%?

Clarie_2

Yes the other barclaycard is 0% till August, and then reverts to its usual rate - which is 6.9% for life on balance transfers, with a transfer fee of 2.9%. Sorry, forgot you'd need that info too.

Pheebs67

Assuming you use the £2,500 to pay the off part of the Halifax card, how long will it take you to pay the remaining £944.31?

At 17.9% APR, you're looking at roughly £14/mnth interest on the remaining balance; if you're going to be charged a ~3% BT in fee to transfer this balance, you have a break even point to consider . . .

If you can clear the £944.31 off within 2 months, it's pointless transferring it - if not, then yes move it . . .

[Deleted User]

Clarie wrote: »

Yes the other barclaycard is 0% till August, and then reverts to its usual rate - which is 6.9% for life on balance transfers, with a transfer fee of 2.9%. Sorry, forgot you'd need that info too.

In that case. ..

1 Pay off Barclaycard with £1900.
2 Pay £600 to Halifax.
3 Transfer £2,900 Halifax remainder to other Barclaycard, so you have your whole debt on 0% for 6 months and then 6.9% for life of balance.

That should do the trick. As long as you don't miss payments etc, you'll keep the 6.9% until the balance is paid off.

Clarie_2

Pheebs67 wrote: »

Assuming you use the £2,500 to pay the off part of the Halifax card, how long will it take you to pay the remaining £944.31?

At 17.9% APR, you're looking at roughly £14/mnth interest on the remaining balance; if you're going to be charged a ~3% BT in fee to transfer this balance, you have a break even point to consider . . .

If you can clear the £944.31 off within 2 months, it's pointless transferring it - if not, then yes move it . . .

Thanks Pheebs - it's possible we could pay the 944.31 in two months, if cunning budgeting goes to plan, so this seems sensible.

Though it does leave my last debt at 6.9% instead of at 0 - (I think I could clear the rest by Aug, all going well). Does that matter? or will I again pay more in transfer fees than I'd save?

Clarie_2

Deleted_User wrote: »

In that case. ..

1 Pay off Barclaycard with £1900.
2 Pay £600 to Halifax.
3 Transfer £2,900 Halifax remainder to other Barclaycard, so you have your whole debt on 0% for 6 months and then 6.9% for life of balance.

That should do the trick. As long as you don't miss payments etc, you'll keep the 6.9% until the balance is paid off.

Thanks zx81 - does this still work out cheaper with transfer fees included?

[Deleted User]

Roughly, if you could pay off within 3 months, you're probably as well to leave it on Halifax. More than that, and you're better off switching.

There's better people than me round her who could do the calcs correctly - ie using your monthly simple or even daily rate on the Halifax, to see how it compares to the flat 3% over time. You should really also factor in the lowering balance, which only has an effect on the Halifax (as you're charged daily, whereas on Barclaycard you're charged 3% of the total, regardless of whether you pay if all off the next day).

Hope that helps (a bit).

Clarie_2

The maths goes beyond me as well! Its really helpful tho, seeing that if I pay it off quickly it works out better than transferring. I think the most helpful thing in all this has been realising that if we keep paying off at this rate we'll be credit-card-debt free much sooner than I thought :-)

And now it's a matter of 10s of pounds to transfer or to have high interest rates. (When I started this debt repaying malarkey it was hundreds of pounds and decisions made a huge difference. Life looks so good from this perspective!)

Pheebs67

Clarie wrote: »

Thanks Pheebs - it's possible we could pay the 944.31 in two months, if cunning budgeting goes to plan, so this seems sensible.

Though it does leave my last debt at 6.9% instead of at 0 - (I think I could clear the rest by Aug, all going well). Does that matter? or will I again pay more in transfer fees than I'd save?

Assuming you can pay off the Halifax in 2 months and clear your £1,845 BC debt by August, then;

Breaking the £1,845 down into 6 equal payments of ~£310 a month, you're looking at about £40 in interest over the 6 month period. (Obviously this'll be even less if you can front load some of the payments to reduce ongoing interest - by keeping up your 'cunnning budgetting' rate if this is sustainable and paying ~£475 a month, you'd have it paid off by June / July time and only get hit for ~£26 interest)

So as a 3% BT fee on the same amount would be ~£55, you're actually saving £15 ish by leaving it at it's current 6.9% rate rather than shifting to the 0% until Aug.

Clarie_2

Pheebs67 wrote: »

Assuming you can pay off the Halifax in 2 months and clear your £1,845 BC debt by August, then;

Breaking the £1,845 down into 6 equal payments of ~£310 a month, you're looking at about £40 in interest over the 6 month period. (Obviously this'll be even less if you can front load some of the payments to reduce ongoing interest - by keeping up your 'cunnning budgetting' rate if this is sustainable and paying ~£475 a month, you'd have it paid off by June / July time and only get hit for ~£26 interest)

So as a 3% BT fee on the same amount would be ~£55, you're actually saving £15 ish by leaving it at it's current 6.9% rate rather than shifting to the 0% until Aug.

Ok, it's a plan. £2500 to go on Halifax, plus whatever else I can scrape together/ am given etc, plus my normal over payments till it's cleared. (We are over-paying debt to the tune of ~400 a month, plus last month we cleared the other barclaycard, giving us more as well)

And then the overpayments can go to my barclaycard.

And then all that is left is one loan (to a family member at 0%). Hurrah hurrah for an end in much earlier sight than I could have hoped. :T