Would you transfer balance in these circumstances?

Seaxwyn

Hi fellow DFWs

I'm looking for some advice from a snowballing expert.

I have an M&S credit card with APR of 3.9% for life of balance transfer. BUT, I made two purchases on this card in Feb totalling £81.12. These plus the interest they accrue are at the standard rate of 17.9%. You don't have to tell me how stupid this was, I am cursing myself and will never ever do it again.

But I'm wondering if even despite this it is still worth transferring more money off my Abbey CC, which goes up to 12.9% APR in June. As the majority of the debt on this card is balance transfer at 3.9%

How does snowballing work when one card is both your top priority and lowest priority debt?

Thanks for any advice anyoen can give.

ZTD

How much off your abbey card?

Seaxwyn

At present I could only transfer £350 off my Abbey card, but I was planning to ask M&S to raise my credit limit.

Abbey stands at £5974.64 - this is my main priority debt for snowballing - or was until I realised I actually had higher APR on the M&S card (goes back to beating head against wall)

savvykaz

Hi Seaxwyn,
The only problem is, is that all credit card companies use any payments you make to them, to pay off the lowest apr 1st. So the money you spent on your card at 17.9% will be there until all your LOB transfer has been paid, accruing interest every month. Don't want to sound too depressing, just wondered if you knew

Seaxwyn

Hi savvykaz

Yes I do understand that, which is why I'm so fed up with myself.

I can't begin to think how to work out whether to add any more balance transfer debt at 3.9%, blocking that other amount for even longer.

M&S is my lowest interest debt so I was not going to pay it off for a very long time.

savvykaz

Is there any chance you could balance transfer the whole amount from the M&S card onto one of your others and then that amount (inc. the Abbey card) back onto the M&S? Just check with M&S when the BT period is over

ZTD

Yes, it would be worth it.

Seaxwyn

HI savvykaz

You're a genius! Thanks! The BT period ends on 20 May so there should be plenty of time.

My OH has a card we could use to do that. But is there any risk that M&S would refuse to accept the balance back again?

bandraoi

are there balance transfer fees with the M&S card, or the Abbey card?

£81.12 at 17.9% per year = £14.52.
£81.12 at 3.9% per year = £3.16.
Saving of a double transfer = £11.36 per year

£350 @12.9% = £45.15
£350 @ 3.9% = £13.65
Saving on one balance transfer = £31.50 per year (ignoring the fact that you're paying it off)

Seaxwyn

Thanks bandraoi, that puts it in perspective.

There aren't any transfer fees with the M&S card and if there are easy ways to whittle down the big Abbey balance before it leaps to 12.9% I'd like to do it.

I know that transferring is only a distraction from the real task of paying off, so I don't want to spend too much time thinking of it. But Savvykaz has made me realise I should enquire if there's a good bt offer with my OH's card, which I'd never even thought of using in this way. His doesn't figure on my debt list as it's paid off in full each month.

ifstar

Can't really offer much more advice than the guys above other than if you have a card for balance transfers only then do not carry it about with you in your purse/wallet. It's probably not a bad thing to actually cut the card up as soon as you get it as this will take away all temptation to use it.