query on credit card and cancellation fees

beadgirl87

Hello,
I am new to the forum and am hoping for some advice.
I currently have a lloyds tsb student credit card with £500 on it at 19% and have been reading on here about balance transfers to new credit cards. I have seen one that I am going to apply for, however I thought I should check my terms and conditions first as I would be cancelling my old card. Having read them, I see nothing about final payment, cancellation or transfering fees. Is there anything else such as an admin fee I should take into account? If I get the new card, will my current bank be completly fine with me transfering the balance and how exactly does this work?
Although I can see there are better deals out there I am still a little scared of leaving this card.
I will be aiming to pay it off as soon as possible as I am trying to get rid of all debts.
Thank you in advance.

chattychappy

When you do a BT, your old card will see it as a simple payment - so no charge.

After the payment has arrived, continue to check statements. There will be some residual interest which you can pay off in the normal way. This will be relatively small. After you've had a couple of statements with a zero balance, then close the account if you wish.

There won't be any fees from the old provider for closing the account or handling the BT - as I say, it's just another payment as far as they are concerned. But you will have residual interest.

It is quite difficult to work out an exact amount to BT in order to clear the balance. Interest is calculated daily and applied monthly. One way is to overpay slightly - but that's a technical breach of the T+Cs because you are not allowed to put the account into credit.

So the simplest way is just to BT your current balance and expect to pay a bit more interest later.

Finally, if you have signed up for any subscriptions/insurance etc which are collected by way of "continuous payment authority" then you must cancel this with the merchant concerned and give them the new details. There is no "transfer" service and even though you might cancel your old CC, it could come back to life again if CPAs are still hanging around.

beadgirl87

Thank you for that, that is very helpful and has put my mind at ease. One more thought, is there an issue if the 2 banks are part of the same group? I'm thinking of getting a Halifax card which is linked to RBS and therefore I think Lloyds the old provided?
Lastly, will closing the old account in a few months have a bad effect on my credit rating, or should I keep the account open?
Thanks

chattychappy

beadgirl87 wrote: »

One more thought, is there an issue if the 2 banks are part of the same group? I'm thinking of getting a Halifax card which is linked to RBS and therefore I think Lloyds the old provided?

Normally you can't BT between CCs operated by the same group.

Perhaps someone can confirm that you can't go between Halifax and Lloyds.

beadgirl87 wrote: »

Lastly, will closing the old account in a few months have a bad effect on my credit rating, or should I keep the account open?

Different lenders take different views. I think it depends on a number of factors.

Eg: if you max out your new card, and the old one is the only other card you have, then keeping it open will be a good thing. The reason is you will look less distressed as you won't be using all your available credit.

If, on the other hand, you are on a small income and you have a high limit on your old card, then with the new card you will have alot of credit available. That might stop some lenders lending to you in case you "go crazy".

On this forum, posters often seem to favour shutting down cards in case it stops them getting new credit. I don't feel it has ever stopped me getting credit. Most of my available credit is unused and I have an available credit which is greater than my annual income.

Other things being equal, I would keep it open. Useful to have a backup, especially if you travel. Some people cancel them to avoid temptation, to be able to cash in on "new customer" deals again or simply to reduce the risk of fraud and keep life simple.