The credit card shuffle

DebtFreedom_2

Hi all

I've been shuffling credit cards for a little while. I recently used Barclaycard and Santander; and then transferred on a 0% BT to Virgin and AA (both with MBNA). I now have until December 2012 on both.

I have £6.5k and £9.5k outstanding debt; and hope to clear at least the £9.5k by December, leaving me with the smaller card left. I'll need to do a balance transfer at this point.

I've cancelled the Santander as the available credit was too low. My question is, should I cancel the Barclaycard and make a fresh application in November time? Or, should I keep the Barclaycard and hope that they have a BT offer available in November?

Risk with closing Barclaycard is that I won't be able to get the credit; but the risk with keeping open is that they won't provide a decent rate. But, I won't have enough time by then for them to drop off my credit history to give me enough available credit for another provider.

Phew.

Another question: as I pay off my debt, should I reduce my credit limit as well? It would just make me feel better to see both balances and credit coming down!

Thanks!

DebtFreedom_2

Sorry, and another question: would I be better off paying more than the minimum payments over the BT period? I've head somewhere that it's the better strategy, but not sure why.

Ben8282

DebtFreedom wrote: »

Sorry, and another question: would I be better off paying more than the minimum payments over the BT period? I've head somewhere that it's the better strategy, but not sure why.

Paying more than the minimum will avoid minimum payment markers on your credit reports.

It will also show to the lender that you can afford more than the minimum repayment.

However, you have paid a fee upfront in lieu of interest, so paying off too much would be foolish.

Unless someone else has a better idea, I would suggest a small additional payment each month.

Ben8282

As to your original question, am assuming you have two cards with transferred 0% balances of £6.5k and £9.5k plus the Barclaycard with a nil balance and a credit limit of over £6.5k. I am also assuming that you will be in a position to fully repay the £9.5k in December and will be looking to transfer only the remainder (£6.5k - your payments) in December 2012.

If the above is correct I suggest you keep the Barclaycard and use it for purchases, paying in full every month therefore avoiding interest. Your continued use of the card should keep Barclays happy, especially if the spending is substantial, and make it all the more likely that they will give you the new transfer when you need it.

With regard to reducing your credit limits, although there are many who would advise you to do this as a way to avoid getting into further debt - which is of course very good advice - personally I don't really like the idea of reducing/cancelling things because I worry that I won't get them back if I want them again.

bouncydog1

Keep bcard open - then in November (a few weeks before your offer runs out) call BC and ask about offers. If there are none say you want to cancel the card - you should be handed over to retentions who will probably give you an offer (12 mos 0% for instance) to keep your business.

Hazzinho

I've never in 12 years been offered an extended 0% when i leave any cc companies when the 0% ends so don't bank on them doing that. Last cc lender i used was barclays all they offered was £10 credit to stay with them.

sheslookinhot

Close the Barclaycard and reapply in November.

DebtFreedom_2

Thanks all. I've bitten the bullet and cancelled both cards. What do you know? They wanted to pass me to their customer retention team to see if there was anything they could do for me...!!

DebtFreedom_2

I tried to arrange a payment above the minimum with MBNA and apparently not possible - it's minimum, maximum or nothing at all!! If I paid something by standing order each month, I assume it would still register as only a minimum repayment? Stupid banks.