Credit Card Juggling

thedaveyb

Hi,

We are in the process of a financial clean up in order to get a mortgage in the next 12-18 months (or longer depending how this goes!).

Between myself and my partner we currently have 3 credit cards.

1. Mint Card - Balance £1890 and Limit £1900 (Mine)
2. Capital One - Balance £180 and Limit £200 (Wife)
3. Barclay Card - Balance £380 and Limit £400 (Wife)

All out of any interest free etc so we are paying interest monthly.

My first thought was to call Capital One/Barclay Card and see if either would take the balance of the other as a balance transfer to make one less monthly payment and give us the one figure to aim to pay off rather than the two.

However wanted to put it out there and see if anyone had a better suggestion. At this current time both credit ratings for myself and wife are poor albeit this is down to amount of finance and not anything adverse such as a CCJ or such like.

[Deleted User]

Your first job is to find out what interest rates you are paying on each.

Doing a BT blindly will simply cost you a fee and potentially increase your monthly payments.

Also, you have virtually no available credit on any card to actually do a BT at present.

Naf

Unless one will up your limit to take a BT, you're unlikely to get one. I know my Barclaycard wants at least £100 available, and that after the BT there's at least 10% (I think) still available on the card.

As above check your interest rates, and focus any overpayments on the card with the highest rate.
If you can handle it, there are a few ways to reduce the interest you pay, as well as making the payments easier to handle (by making them feel lower). Whatever budget you have for food & bills each month, pay it immediately onto one of the cards (even better if you can arrange to make this payment while a payment is due, to save having to make a minimum payment separately). Then use the credit card for your spending, groceries etc. wherever possible. Repeat the following month and you will find that the interest you are charged is reduced. You can save even more if you also pay things like phone/Internet/utilities from the card too instead of DD (but only if you're sure you can juggle it.
Eventually you get to a point where every month you're paying off the full balance, because that's the value of your food/bills and so you are no longer paying any interest. Once you're spending more in the month than you need to pay off the card, that excess can be paid off the card with the next highest rate to start reducing interest there.
It does require a bit of juggling and planning, but it also helps get the cards paid of faster.
There is a bit of a risk because in theory CC companies could reduce your limit. It's fairly unlikely as you'll be making all your payments etc. but it's a possibility to consider.

grumbler

If you are struggling just to pay £180 and £380 balances off I don't see how you can save for a mortgage deposit during just 12-18 months.

geekonthepc

grumbler does have a point - might be worth thinking about that one. Nonetheless, interest is by far your biggest problem.

To be honest, you may well find you struggle finding a balance transfer when the amount owed isn't terribly high - I know for a fact HSBC wouldn't allow me to balance transfer my BC unless the amount on it was more than £200 (Before you ask why I would want to, I didn't! - I was purely curious as they offered me 23 months int. free).

My best advice is just to focus on getting your wife's cards down as quickly as possible.

For yourself, your balance is higher, so you might want to look at a new balance transfer card to move what you owe on to that, so you can kill off the interest you are paying and start working down the balance.

UsetheFORCE

geekonthepc wrote: »

grumbler does have a point - might be worth thinking about that one. Nonetheless, interest is by far your biggest problem.

To be honest, you may well find you struggle finding a balance transfer when the amount owed isn't terribly high - I know for a fact HSBC wouldn't allow me to balance transfer my BC unless the amount on it was more than £200 (Before you ask why I would want to, I didn't! - I was purely curious as they offered me 23 months int. free).

My best advice is just to focus on getting your wife's cards down as quickly as possible.

For yourself, your balance is higher, so you might want to look at a new balance transfer card to move what you owe on to that, so you can kill off the interest you are paying and start working down the balance.

I have very low limit cards, £100..£200 and £400.

The £400 has a low LOB BT on it but the other two are paid off in
FULL each month and used up again on Food Bills etc...

You should do the same on the two very low limits as you will avoid the interest.

Bar my T-mobile which incurs a hefty charge for not paying by online transfer/DD, I pay EVERYTHING else, monthly insurance, Sky, Catalogues...

You should mentally lower the limit by say £10 each month otherwise it is a little bit more effort for no apparent gain as the saved interest will disappear, the added turnover might actually get them to increase your limit.