Balance transfer or keep savings in the bank

delmar39

Hi all I'd really appreciate your thoughts on my current situation.

I currently have the following cards, all on 0%:

M&S £2,242.52 pay by March 14, Lloyds £877.02 pay by January 14, Natwest £3,394.82 pay by October/November 13: Total £6,514.36

I have built up the savings into an ISA (3.1%)/regular savings account (4.8% after tax) to start paying them off, first one due November this year and so on. I have this amount of debt following a small extension we had built last year.

My current plan is to pay the Natwest and Lloyds cards off when they're due and transfer the balance of the M&S card to a long 0% deal - 1. to reduce the debt; 2. to leave some of the money saved in the bank.

I know it's a personal choice and down to BT fee versus amount of interest generated, but the question is would you give up the money saved to pay off the cards I mention, or would you BT them all?

I'm also considering upgrading my Nationwide Flex to a FlexDirect to make use of the interest free overdraft 1 year facility.

Any comments welcome.

Cycrow

If the balance transfer is cheaper than what you get from your savings, then it would make sense to keep them at 0% for as long as you can.

as you have the money to cover it in savings, you always have the option to clear them at any time.

just as long as there is no temptation to end up spending the savings and then not have the money to cover it when the 0% ends

delmar39

Cycrow wrote: »

If the balance transfer is cheaper than what you get from your savings, then it would make sense to keep them at 0% for as long as you can.

as you have the money to cover it in savings, you always have the option to clear them at any time.

just as long as there is no temptation to end up spending the savings and then not have the money to cover it when the 0% ends

Thanks Cycrow. I'm building my emergency fund back up following the extension and even if I paid them all off in line with the deadline dates I'd have sufficient funds in the bank to hit my emergency target. This money will never be touched! I'm aiming to max my ISA allowance each year, the rest is going towards a new car at some point, but if my little un has her way it'll be a trip to Disney Land Paris! I also want to refocus on mortgage overpayments at some point too. Thanks again for taking the time to reply.

WoZG_2

Google stoozing balance transfer i think its one of Martins sites and its lists how much you can earn by using this method

planteria

yes, try this:

http://www.stoozing.com/calculator/index.php

if it's even slightly profitable to stooz, and you have discipline, i would retain the savings and the debt....in so doing you continue to demonstrate that you can borrow & repay, and your bank(s) see that you are someone who can remain firmly in the black.

delmar39

planteria wrote: »

yes, try this:

http://www.stoozing.com/calculator/index.php

if it's even slightly profitable to stooz, and you have discipline, i would retain the savings and the debt....in so doing you continue to demonstrate that you can borrow & repay, and your bank(s) see that you are someone who can remain firmly in the black.

Thanks for this I'll have a look and do some work on it. I like your note about borrowing and repaying and how this looks to banks. Part of me just wants to get rid of the debt and move on, but it would be great to keep the money in the bank whilst still paying off the debt.