Confused about minimum repayments

Raystorm

Hi all, I'm using 0% balance transfer cards to help try and pay my cards off a bit quicker, and I'm a bit confused regarding the minimum payment. I've transferred some to an Abbey card, and I was expecting a minimum of around £100, but it's only £5. I've was going to apply for a Tesco 0% transfer card, until I saw that the minimum would be 3% of the total, which when I worked it out would be more that what I'm paying now, with the interest included! Has anyone got any idea how I can reliably calculate this, as I really could do with transferring the balance as I need to save some cash!

jamalfatty

Abbey is the lesser of 2.25% of balance or £5 + interest + charges + ppi - so as your on 0% and assuming you pay on time and dont have ppi the minimum payment will be just £5.

Tesco's min payment is greater of 3% or £5.

If your balance is currently already on a 0% card, you'd be best leaving it where it is until it comes near to reverting to it's standard rate

Raystorm

Thanks for that. I only transferred some from my card, I've still got some on it I need to transfer. So, I am right in thinking that the Tesco card would be a lot higher than the Abbey card, it doesn't have the same 'or' clause. Are there any other card that have the same repayments as the Abbey card? Also, I still can't figure out how the 3% min of the Tesco card still works out more expensive that waht I'm paying at the moment, including the interest!

jamalfatty

If they are both on 0% then it doesnt work out more expensive, it's exactly the same, its just you would be reducing your balance quicker on the Tesco card.

Any card issued by MBNA (A&L / Virgin / Abbey / MBNA) has the £5 min payment - you wouldnt be able to transfer the balances directly but there are ways around it.

Raystorm

Thank for explaining. I'm also trying to reduce the payments that I have to make each month, as I was made redundant, and my new job pays less than the old one. So, from what you say, MBNA cards are the only ones that do this, and seeing as I've already got one, I won't be able to get another?

thesaint

Raystorm wrote: »

Thank for explaining. I'm also trying to reduce the payments that I have to make each month, as I was made redundant, and my new job pays less than the old one. So, from what you say, MBNA cards are the only ones that do this, and seeing as I've already got one, I won't be able to get another?

You can get another card from the MBNA stable, but you can't transfer a balance directly from one to another.

thumshie

Raystorm wrote: »

Also, I still can't figure out how the 3% min of the Tesco card still works out more expensive that waht I'm paying at the moment, including the interest!

Minimum payments don't normally take interest into account(MBNA being one of the exceptions). As you don't name your exisitng card I can't say for sure but you'll probably find that the minimum payment is only 2% or 2.5%, thus it's lower than tesco's 3%.

While you can get more than one card from mbna(I beleive upto 5 from other posts), from my own personal experience, they share your credit limit over the cards. I.e. they reduce your credit limit on the existing card by the amount given on the second. Thus in your case it may not help as your exisitng card will be max'd out.

jamalfatty

thumshie wrote: »

While you can get more than one card from mbna(I beleive upto 5 from other posts), from my own personal experience, they share your credit limit over the cards. I.e. they reduce your credit limit on the existing card by the amount given on the second. Thus in your case it may not help as your exisitng card will be max'd out.

There's no limits to how many cards you can get, only limiting factor is the total credit line. Your partly right with your second point above, but that assumes MBNA have already lent the maximum they would be willing to, they may increase the total credit available upon asking/new application

Raystorm

Thank, I'll try increasing the limit on my Abbey card and then transferring some more across.