'Partial' 0% Balance Transfer - is it worth it?

garynuman

Hi all

Back for some more great advice!

I have 3 credit cards as follows:

MBNA (Have rejected APR increase and aim to CLOSE this account)
Credit limit £11500
Balance £10500
Min Payment = £250
APR 19.9%

BarclayCard
Credit Limit £3500
Balance £1873.16
Min Payment £40
APR 23.4%?

MINT
Credit Limit £4500
Balance £0
Min Payment £0
APR 20.8%

I have just been invited to a 6 month 0% APR balance transfer to my MINT card (£4250).

Is it worthwhile transferring £4250 from my MBNA card (95% of limit)onto the 0% MINT card? I will not be in a position to make anything other than the minimum payment to MINT if I do this as I have other commitments (I want to clear the Barclaycard with higher APR). The balance transfer fee is 3% so will cost £127.

Or is there another way I'm not seeing?

Many thanks, best regards and a happy new year to all.


Gaz

camuk81

Yes in the short term as you are paying back more of the interest however looking at the apr in the long term you pay more on the mint card in APR. You will need to pay at least £129.76 which means in 6 months you will have paid looking at a balance of 77.66% on the card and the interest payments will kick in at around £61.35.

Looking at the MBNA card you would only have paid 86.45% of the total balance however you save around £400 interest alone by switching.

Please note these are very rough figures to give you and idea worked out in excel and I have gone with a guess that the mint card payoff is 3%

garynuman

Thanks Cam

You are correct concerning the 3% transfer charge.

The transfer would make perfect sense if I wasn't already throwing money at the Barclaycard to get rid of it!

Trouble is, having no excess cash, it is only buying me a short-term interest break and the higher APR (when it kicks in) will cost more in the long run.

Thanks for advice.

Gaz

camuk81

The advantage is t would reflect better on your credit rating having lesser balances and the mint gives you that option however it looks down on the fact that you will only make minimum payments

triple_choc_chip

You could transfer all of the Barclaycard balance plus £2K of the MBNA to the Mint Card; at which point Barclaycard may then also offer a 0% transfer deal and you could then transfer another £3K from MBNA to Barclaycard.
This would give you nearly £6k on 0% for a period. Also Barclaycard often offer the choice of a low lifetime interest rate which is preferable if you cannot clear the balance during the 0% period.

garynuman

Thanks TripleCC

Unfortunately, I have already done a transfer from Mint to Barclaycard which gives me a bit of breathing space until June 2012. I hope to pay Barclaycard off in 6 months (when the 0% runs out)

I think I'll stick with throwing everything at Barclaycard and then tackle the big-un (MBNA). I hope by then I'll be offered a better 0% deal by the others and hit it head-on!

Thanks for suggestions

Gaz