B/Card BT to Cap One... Worth it??

JimmyTheWig

I'm now slightly confused, dunree.
Basically, you want to be getting rid of the highest interest debt as soon as you can.
So it's hard to know what to suggest without knowing the full picture.

Are you saying that you are paying 2% interest on the JLP card? Or just on £1800 of the £3400 balance? What interest are you paying on the rest?

How much in total have you got each month for debt repayments?

Dunree

JimmyTheWig wrote: »

I'm now slightly confused, dunree.
Basically, you want to be getting rid of the highest interest debt as soon as you can.
So it's hard to know what to suggest without knowing the full picture.

Are you saying that you are paying 2% interest on the JLP card? Or just on £1800 of the £3400 balance? What interest are you paying on the rest?

How much in total have you got each month for debt repayments?

Hi Jimmy,

There's been a slight change to plan, due to B/Card dramatically increasing my limit.

I'll cut and paste some figures I pit together yesterday. I think it makes a kind of sense, if not, please let me know

______________________________________________________


Credit Card Accounts 02/09/2012
JLPC:
Owe £3500
BT’d £1477 at 2%
Leaves £2023 at 16.90%
Limit £4800
Barclaycard:
Owe £3500 at 21.90%
Limit from 9th Oct £8900.
Cap One.
Zero owed.
Limit £3600

---

Possibilities:
BT £2023 from JLPC to Barclaycard at 6.9% for life.
BT £3500 from Barclaycard to Cap One at 0% for six monthsfrom date of BT.
That would leave:
JLPC:
£1477 @ 2%
Available balance: £3323.00
Barclaycard:
£2023 at 6.9% 2.9% fee=£58.67
Available balance of £6877.
Cap One:
£3500 at 0% fee=
Available balance: £100.


At the moment, I budget £1000 p/m for debt repayment, but this can be increased by another £250-00 if necessary.

Does this look ok to you??

JimmyTheWig

That's a great plan to reduce the interest rates that you are paying.
However, the fees are pretty high in order to achieve this.

If you pay a 3% Balance Transfer fee and then pay the balance off the next month, even with no interest on the second card that's an APR or 42%.

You can do this without any Balance Transfers.

Pay the £2400 cheque against the Barclaycard as soon as it clears.
This will leave a £1100 balance on Barclaycard. With worst case scenario £60 interest by the time the next statement comes.
Pay this off in full with your first monthly debt repayment - just pay the minimum on the John Lewis card this month. The minimum on John Lewis will be less that £90, so this should be affordable.

Then you've got the full £1000 a month to hit the John Lewis card. The high interest portion will be cleared in two months. The rest will be cleared in a further two months (with the last of these only being about £500).

Total cost in the region of...
Interest on Barclaycard: £58
Interest on high-interest portion of John Lewis: £65
Interest on low-interest portion of John Lewis: £12
Total: £135


Whereas fees on your "possibilities" plan would be £164 before you even start paying any interest.


Depending on when the statement dates fall and when your £1000 a month is available, it may be possible to save around £14 by transfering £1000 from Barclaycard to Capital One.
Up to you if you think this is worth the hassle or not.

Dunree

JimmyTheWig wrote: »

That's a great plan to reduce the interest rates that you are paying.
However, the fees are pretty high in order to achieve this.

If you pay a 3% Balance Transfer fee and then pay the balance off the next month, even with no interest on the second card that's an APR or 42%.

You can do this without any Balance Transfers.

Pay the £2400 cheque against the Barclaycard as soon as it clears.
This will leave a £1100 balance on Barclaycard. With worst case scenario £60 interest by the time the next statement comes.
Pay this off in full with your first monthly debt repayment - just pay the minimum on the John Lewis card this month. The minimum on John Lewis will be less that £90, so this should be affordable.

Then you've got the full £1000 a month to hit the John Lewis card. The high interest portion will be cleared in two months. The rest will be cleared in a further two months (with the last of these only being about £500).

Total cost in the region of...
Interest on Barclaycard: £58
Interest on high-interest portion of John Lewis: £65
Interest on low-interest portion of John Lewis: £12
Total: £135


Whereas fees on your "possibilities" plan would be £164 before you even start paying any interest.


Depending on when the statement dates fall and when your £1000 a month is available, it may be possible to save around £14 by transfering £1000 from Barclaycard to Capital One.
Up to you if you think this is worth the hassle or not.

I see what you are saying Jimmy, thank you very much for taking up your valuable time to work that out for me

The cheque should be cleared by the end of the week, and I get paid on Wednesday (every four weeks).

The B/card is on a DD for the 11th of the month. Once the next payment goes out, I'll cancel it. All the others are paid when I'm ready via internet banking.

Once again, thanks a million for all your very kind help

Dunree

Hi Guys,

Quick update time.

Cheque cleared a couple of days ago and was duly sent straight to B/Card. Balance now exactly £500. B/card have reduced the DD to £460-00 for the next payment, but I'll clear it off completely once that payment goes through, I'll top it up and change the DD to clear it off every month, so that there are no residual mistakes.

I've also been able to send £540 towards the John Lewis card, which brings that one down to exactly £3000.

Because I'm on four weekly pay, I get paid twice in October, so, it looks like I'll be able to clear everything off by Christmas, and be debt free for the first time in years.

We are now looking at our spending, and making the cards work for us. The closest we have to a rewards card is the John Lewis one. So any future shopping will be done with that, then paid off straight away.

Life is looking good

PS, I should also be getting an Olympic bonus in October, so it might even be sooner