Shifting Between 0% Cards

AdrenalineJunkie22

Hello All,

I currently have £8,000 debt across 4 credit cards all on 0%.

I have taken out credit cards on 0% and then when the expiry was up i would transfer the balance to another 0%, and i would also try not to fill a card to more than 50% of it's limit, hence why so many cards.

I am making minimum payments and then doing extra payments each month of around £400 to the one closest to it's 0% expiry.

Card1 - £2600 balance £5100 limit
Card2 - £2000 balance £8000 limit
Card3 - £3400 balance £4000 limit
Card4 - £240 balance £5000 limit

What i am wondering is am i doing any damage by taking out these cards and then 18 months later cancelling the card?

Am i right in thinking it's best to spread the debt rather than have 1 card with around 90% capacity?

Thanks

chattychappy

In my opinion it makes little difference from a credit rating point of view. The overall picture is more important - ie overall amount of credit, overall amount taken/available etc. Individual cards might take a different view of how you run the account, of course. People have reported paying off chunks off their balance only to have their limit reduced. This has never happened to me and it could be they are showing other signs of distress (eg missed payments, paying standard rate interest, minimum payments only, cash advances etc).

Where you pay the minimum, you should pay at least £1 more than the minimum. Depending on CRA/CC, it is often flagged up if you are only paying the minimum. Pretty crude system, but that's the way it is.

Bear in mind also that it might not always be possible to "keep the plates spinning". 0% isn't really 0% when you consider the BT fee. It's a good deal whilst you are getting 12/18 month 0% periods, but if, say, you paying a 3% fee for a 6 month deal, then you are effectively paying over 6% APR for credit. By no means bad, but look out for LOB deals where you have the added security of knowing you don't keep on having to shift.

Also consider 0% 12 months on purchases cards. The money you would normally spend on day-to-day purchases can then be used to pay down existing balances. You avoid a BT fee that way.

sfax

Some very good advice from chattychappy. I concur with all of it. I have 4 BT credit cards (about £30k limit available), as well as a purchase card, a store card and an amex. I find that the when the debt/limit ratio gets too high, I can struggle with new applications but if you keep it at around 40% you can merrily go on picking up new BT cards and closing old accounts (sometimes a close request prompts a new 0% deal but they are rarely ever as good as the 20-23 month deals available to new customers). I use them in lieu of short term loans because if managed properly you can get an equivalent APR of about 2.5% over 4 years. Currently on 3 18-22 month deals with Nationwide, BOS and Tesco. Just always pay off more than the minimum and know what your projected debt/limit ratio will be at the end of the next 0% deal to maximise your chances of acceptance on your next application.