A balance transfer puzzle.

MrRhodes

Hello everyone, long time lurker, first time poster

Looking for a bit of advice if possible.

I have two credit cards at the moment, had them for several years to help fund life changing events (relocating for work, having children, learning to drive),

I've had more in the past (up to four, but two have since been paid off), and I'm trying my hardest to get these final two put to bed.

From time to time I'm having to spend on one of these to make ends meet.

I'm wanting to get this paid off quicker and I believe that by balance transferring with a 0% offer I can get the totals down.

The problem is that it appears that I'm not eligible for any new cards.

I've been in this situation for a while now, I've checked my credit records, no major issues there. I've spoken with my bank and they advised me to keep a good balance in my account for a few months and they should be able to provide me a good offer on a balance transfer card.

I recently asked about this (after 6 months) and was just turned down on the spot.

Does anyone have any advice on how I could try and get a balance transfer card? I'm meeting my payments on my existing 2 cards (£85ish and £25ish per month), so logically I can group these up to pay off another???


Sincerely,

Someone annoyed with how inhuman the whole process has become.

JimmyTheWig

Did you close the other two cards when you paid them off, or are the accounts still open?
If so, use the four cards to do the credit card shuffle:
http://www.moneysavingexpert.com/credit-cards/cut-credit-card-interest

Even if you just have the two cards you can still play them off against each other if you have enough space before you hit your credit limit.

MrRhodes

I have closed the other two cards.

As for available credit, I have little available on each as I keep having to dip in to make ends meet. Could this be seen as a black flag to other lenders does anyone know?

JimmyTheWig

MrRhodes wrote: »

I have closed the other two cards.

As for available credit, I have little available on each as I keep having to dip in to make ends meet. Could this be seen as a black flag to other lenders does anyone know?

Yes, I think it probably would.
If you have little left on your limits on the cards you have it would probably look like you are looking to borrow more money. Which suggests that you are living beyond your means and have no realistic chance of paying back what you borrow.
We know that's not the case - that you are looking for a new card to transfer a balance to and pay less interest - but they don't know that and wouldn't necessarily believe you if you told them.

I suggest the following...
1. Find out what interest rate you are paying on each of the cards.
2. Pay the minimum repayment plus £1 on the card with the lowest interest rate as soon as you can when the statement comes in (don't wait for the due date unless you have to).
3. Pay as much as you can on the other card, as soon as you are able to pay it. (*)
4. Use the lowest rate card for purchases if necessary, as long as this doesn't take you over your credit limit (allowing for interest to be added).
5. Once you've got the balance on the higher rate card down contact them and ask for a deal on a balance transfer. Hopefully they'll give you a rate significantly lower than you are paying on your lower rate card and you can transfer as much of the balance on the lower rate card to this decent rate.

(*) The quicker you can get this balance down the better. Consider cutting spending right down to the bone. Is there anything you've got that is worth selling? Can you work extra shifts, etc?

MrRhodes

Hey JimmyTheWig

Brilliant, thanks for the advice.

I'll put that into practice and see how it goes.

In regards to point 2, I've currently got direct debits set up for this, are these enough? or should I be doing it manually as soon as like you say?

JimmyTheWig

MrRhodes wrote: »

In regards to point 2, I've currently got direct debits set up for this, are these enough? or should I be doing it manually as soon as like you say?

The advantages of paying by direct debit...
* You never miss a payment by forgetting / being on holiday / being ill / etc. Missing a payment would be a very bad thing to do as it would go on your credit file and make it harder in the future to get good deals. You'll also get charged for it.
* You don't have to do anything once it is set up.

The advantages of paying manually...
* You can pay when you want. Note that you are paying interest calculated on a daily basis. Lets say you pay £50 a month, your interest rate is 18% APR and there are three weeks between your statement date and your due date. If you pay your £50 on your statement date rather than your due date that is £50 less that you are being charged interest on for three weeks. That would save you about 50p. Each month - so £6 over a year. Not a huge amount, I accept, but if you dropped 50p on the street I'm guessing you would pick it up. I see this as no different.
* You can pay what you want. I suggested paying £1 more than the minimum payment. I don't know if you can do this on a direct debit. You don't want to pay much more than this because you want to put everything you can towards reducing the balance on the other card. But it is generally accepted that by just paying the minimum each month puts a minor negative marker on your credit report. So in these circumstances paying £1 more than the minimum would be ideal.


But as I said at the start of this post, the most important thing is to not miss a payment. If you think there is a chance you will miss a payment then keep the direct debit!