Balance Transfer Help

lambda

Hi,

I have 1200 pounds on a post office credit card. APR about 16%.

I also have 2000 pounds in a Barclays overdraft. The first 1000 pounds is interest free and the remainder is at 14%.

I've just been approved for a new CC which has 0% balance transfer for 15 months with Halifax Plus (3% fee). I have about 300 pounds a month to spend on paying debts off. I am aiming to pay all my debts off by the end of the year, if possible.

I am transferring the post office CC balance over to the Halifax card but I'm unsure to transfer any of the overdraft balance over. I only pay interest over 1000, and aim to pay about 200 a month off the overdraft. Is it worth transferring 1000 of the overdraft onto the balance transfer too? This would be about 68 pounds in balance transfer fees. Trying to work out which is the cheaper option and easier option.

Thanks.

Tixy

Are you sure the halifax card would let you move transfer from the card to clear off some of your overdraft I thought halifax didn't do super balance transfers? (I could be wrong if they've changed recently)

If your APR on the existing card is 16% (and its worth finding out) and if you can pay £300 a month off your credt card of £1200 is can be clear in 4months. If you keep it on the 16% card your total cost is going to be around £40. If you pay to transfer it to the halifax card it would cost you £36 in a fee. So hardly worth doing.

lambda

Yes, but I am also trying to clear my overdraft at the same time. I am paying interest over the 1000 pound threshold. The idea was to move the CC debt to a 0% card, get the overdraft down to 1000 and then pay off the card.

Tixy

Then its probably worth transferring the PO card.

As I said I don't think you can transfer the overdraft. Even if you can it wouldn't work out cheaper.
If you pay a minimum payment of say £25 to your 0% credit card each month, then you can reduce the overdraft by £275 a month. So it would be clear under £1000 in 4months and would cost less than £30 in interest in that time.

lambda

Hi,

My PO card is 16.95% APR; the balance is 1276 debit.

My overdraft is 19.29% APR from 1000 to 2,800.

My salary after tax, pension and student loan is 1700 a month. All my bills come to £941 a month. I have an RBS budget account where I pay £350 a month for food/petrol/living allowances. The remainder (actually 409 not 300) I have to spend on clearing debt.

My overdraft balance today after being paid this morning is -513. I was a student for 8 years (undergrad then PhD) so I haven't been in credit with my overdraft for about 6 or 7 years. I'd like to pay the overdraft off first if possible, and then the credit card debt. Does this sound reasonable?

The goal is to start saving for a house with my partner, but we don't want to do that until all this left over student debt is killed off now that I am earning.

Thanks!

Tixy

Sounds like a good plan.

Just pay the minimum repayment off the new card to start and leave the remaning money in your overdraft to a point where you are not going over the £1,000 limit on the day before pay day - should only be a 3-4 months. Once you have got to that point it might even be worth reducing your overdraft limit to £1k.

Then after that it shouldn't make any difference whether you choose to pay off the card or remaining overdraft first, as both will be 0% and both should easily be cleared within the remainder of the 15months.

lambda

Thanks for your help. Hopefully I'll have all this debt cleared by the end of the year then we can start to look into savings options.

I have to say that this site is excellent: friendly, excellent advice that isn't patronising or over complicated. Wish I'd known about 'moneysavingexpert' when I was a student - would have saved me a fortune!

Thanks again.