Unoffical Existing Customer Balance Transfers

byebyedebt

All, over the next couple of months credit card companies will start gearing their systems following the changes on negative payment hieracy. IE Your payments will no longer go towards the cheapest debt first leaving you with higher debt still being charged interest.

I suspec this will mean that it will be harder to get cheaper balance transfer rates on existing balances. If you are going to transfer a balance using a lower rate than your current purchase rate, it might be worth doing it now. Just a thought.

polyalloy

byebyedebt wrote: »

All, over the next couple of months credit card companies will start gearing their systems following the changes on negative payment hieracy. IE Your payments will no longer go towards the cheapest debt first leaving you with higher debt still being charged interest.

I suspec this will mean that it will be harder to get cheaper balance transfer rates on existing balances. If you are going to transfer a balance using a lower rate than your current purchase rate, it might be worth doing it now. Just a thought.

yes, this is a important change. I just received letter from Virgin regarding this: From 1 September 2010 any payments you make will always paying off balances at the highest interest rates on your credit card first.

rjh35

Couple of offers from Virgin over the last couple of days:
6.9% for life and then day after 0% until April 2011. For both balance transfers and transfers to current account.
As I have some standard rate purchases on there, did the 0% money transfer, will wait until September when new payment hierachy is in place and then use this to get rid of higher rate debt, so remainder is at 0% until April.

udydudy

rjh35 wrote: »

......6.9% for life and then day after 0% until April 2011. For both balance transfers and transfers to current account........

Any fees???

bobnodgers

That sounds like bad luck

sammyjammy

polyalloy wrote: »

yes, this is a important change. I just received letter from Virgin regarding this: From 1 September 2010 any payments you make will always paying off balances at the highest interest rates on your credit card first.

And from the same date 5% fee for balance transfers

rjh35

udydudy wrote: »

Any fees???

Yes, 4% for the money ransfer or 2.98% for balancer transfer

gkb_2

Tesco currently offering me 2 BT offers

1.9% for 6 months with 2.5% fee
7.9% Life of balance with no fee

They are able to do both offers at the same time which given the upcoming change in payment order to come will not be as bad as it normally would be when the 1.9% offer switches to the standard rate.

Poosmate

Please be careful with the low life of balance transfers. Yes the interest rates are low compared to standard rates but please check out the repayment rate.

I have a Barclaycard low life of balance card at 6.9% but the repayment rate is set at a rediculously low rate. The minimum monthly payment is set at interest + 0.25% of balance, so I'm reducing the debt by only 3% per year! EEK! I am paying off my other credit card with a higher interest rate by 10.3% per year - over 3 times quicker.

This is ok whilst the standard rates are rather high but will be very bad if the rates fall back to 7.9%/9.9%/11.9% (oh remember those days? *sigh*) and 14.9/16.9 was considered high! lol

I guess the up side of paying off so little is that it frees up more cash to pay off those cards with a higher interest rate.

Don't be duped into thinking that if you leave the balance to run it's course, you'll be paying less interest. There's a good possibility that you'll pay as much, if not more only over a longer period.

Please be aware of your repayment rate and how it compares to your other cards.

Hope that helps.

Poo

mrbigd

I've just got another 6.9% offer from barclaycard and my repayment level is 2.25% per month.

So the repayment level must be different for different customers.