Nearing end on 0% will new applications hurt?

LEO05

Hi guys,

I hope you are all well, got a bit of money and credit query please:)

Right I got 2 credit cards, M&S which I have £900 on and Virgin which I have £2500, both are coming to the end of their promotional 0% next month so I am hoping to apply for new promotional cards.

My credit rating is really good and I never miss payments, so do I apply for 2 different cards or should I put it all in 1 card?

The reason why I want 2 cards is with my M&S I also do purchases and then pay it back but with Virgin, I dont touch it, just do repayments, will they charge me for purchases with the new cards?

Also if I do get accepted, do I close both M&S and Virgin?

Finally, Will applying for new cards affect my ratings or hurt me cos I am moving from one to another?

Thank you lovely people.

guesswho2000

My advice would be to put it all on one card, if the issuer will give you a sufficient limit.

There's no benefit to having the debt in two places from my point of view.

One (or even two) searches is unlikely to cause you any problems assuming you haven't got loads of searches on your file already.

With regard to the purchase aspect, just use one of your existing cards and pay it off in full each month. You can then close the other one.

LEO05

Thanks for that guesswho,

If a company do a search, lets say 1 or 2 a year and grant you credit, does this still hurt or it doesn't matter and only hurts your rating when it is rejected?

cheers :-)

guesswho2000

No problem. It's only the search which appears on your file, not whether the application was accepted or rejected, no record of this is kept.

The only issue from this arises when credit is granted, as a new account will then appear on your record (extra available credit etc) but if this is only 1 or 2 per year it'll have little or no impact.

As a comparison, in the last six months I now have six searches (and the resultant six new accounts), which hasn't really affected me. However, I won't be applying for anything else, as I reckon I'm at the limit of what they'll give me in a relatively short period of time!

StuC75

Point to consider with Virgin \MBNA is that good customers keep recycling Balance Transfer offers (e.g. My Virgin and MBNA cards have 12 month deals available)..

LEO05

Thanks once again guess who ;-)

I have just read that, once you get the balance transfer, keep the old one open so that your payment history is kept up and your payments are shown? However wouldn't this surely means you are increasing your credit cards and can be seen as having too much credit or because it stays 0 it is ok?

really confusing all this balance transfer and credit rating malaki lol.

LEO05

Thanks Stu for that, so are you saying that, if I approach Virgin, they can extend my 0% period?

EJG1982

hiya LEO05

as guesswho mentioned, ideally keep it to one card, first speak to the existing holders and see if they can offer any 0% periods but bare in mind you dont always get as good deals as new cards. my Natwest one offered 6mth at 0% without even asking. im not 100% but i dont think they generally extend offers on existing balances, just on new balances?? tho like i say not sure..

Also remember to check what balances can be transferred to which cards. I recently took out 22mth 0% with MBNA with the intention on transferring virgin balance who have a shockingly high apr, didnt do 100% homework and found i couldnt transfer as mbna own virgin/vice versa.. not too bad in my position as i had other cards i could transfer.

i think m&s are part of HSBC so avoid any cards under the HSBC group or you may not be able to transfer..

if you do clear these cards, try to keep them on zero to low balance rather than cancel completely. The amount of 'available' credit is factored into your credit history. Companies may look at how much available credit you have, if your maxed out on 1 card and using 90-100% of 'available' credit they may look at it that your desperate for credit and struggling to repay. If you have a healthy amount of available credit then its shows you're not credit hungry and have the ability to reduce your balances.

Searches over a short period of time is one of the factors affecting history. A company will note how many searches you had but not see the outcome, they review how many 'new' creditors have issued you cards/credit etc. Even if you are accepted but you dont go ahead, another creditor will see the searches but not the fact that your were approved but turned it down. They may assume as no 'new' credit is showing you were declined.. (if that makes sense lol)

Its worth having a look at your file prior to arranging new credit, free for a month/£2 for copy (various options to do this) and gives you an idea of whats held, whats showing, your positive/negatives areas. Defo dont take for gospel what your file says as every creditor is different but makes great viewing to see where your at and where you could improve. i had neg factors as not on electoral role and have never completed a credit agreement in full (sofa/tv on credit etc)..

with regard to charging for purchases, it all depends on the offers. Some offer 0% rates for a set period, but not always as long as the balance transfer. think one of mine was around 9mth but i dont use them for that part.

let us know what you come up with & good luck

StuC75

They wouldnt extend a 0% period, theres often a chance that a new offer will appear on the account online (have had these appear whilst having other deals running)

So if you had another account (outside of virgin \ mbna) it becomes possible to shuffle the deals about.. (e.g. repay the current deal, wait for it to clear, then do further balance transfer) - this incurs another balance transfer fee..

Obviously this all depends upon fees and the size of balance being moved.

In short check the online account manager and see if its offering you any deals at the moment - this would be good way to see if feasible - although I am always wary of having 2 transfers on the account at the same time..

LEO05

Thank you EJG, really helpful post.

I am thinking more to keep M&S card now, the interest is only £15 per month and transfer my big balance on Virgin across, i hear many people use these balance transfer offers when the time is up but it seems a little more complicated than it actually is lol.

EJG1982

no worries!

dont rush to move virgin across to M&S if you dont have any promotional rates left, you will pay a balance transfer fee and still be paying interest so doing yourself no favors.

if you're happy to keep M&S and you use it for purchases that you pay off quickly then i would say just find another 0% for the balance of the Virgin card. At least start with that, if its the first time you're experiencing transferring balances then it will give you an idea of how easy it is etc.

Find a long 0% that will accept MBNA/Virgin.. and move just the Virgin balance. Have a quick search online for credit offers and you'll see whats about..from memory i think Halifax and Barclaycard will accept it.

defo dont be deterred by thinking its complicated it really isnt. You can apply online in minutes and before you know it you have another 12-22mth interest free!! Much better than your current rates ending and you suddenly start seeing the balances aren't going down and most of your payment is going to interest!!