Balance Transfer question

Tomuk_2

Hi,

I have 2 cards, one with Barclays which has about £4000 balance on at 22% (nasty)

I have another card with capital 1 which only has a limit of £1000 but a 0% for 6 months on balance transfers.

Barclays give you a 6% (ish give or take 1%) rate for all balances transfered to them so my question is, if I balance transfer £1000 to capital one, then transfer it back to Barclays and do this 4 times, will the full £4000 then be on the lower rate?:D.

Also will i need to wait a month between transfers or anything? (i understand ill need to pay a % to do the transfer both ways).

Can you think of a better way to achieve the same result? (other than other cards as for some reason I cant get one, even though I have no negative data on my file).

Another way I thought i could do it is as my capital one has a 0 balance, I could take a cash advance for £1000, pay £1000 barclays, then transfer the £1000 on the capital one over to barclays and do this 4 times.. that would save me some money with the transfering as only half the transfers required...

Anything think of any issues with this idea which is a bit of a pain but i need a lower rate.

grumbler

You can do this, but your BT limit at C1 is likely to be smaller than the credit limit, so it's cant take more than 4 times.

There is no point in waiting for a month. Just make sure that C1 balance is transferred to Barclays before initiating the next BT.

Tixy

Are you sure it is going to work out cheaper by the time you have paid the 2 lots of balance transfer fees? and given that the debt will still be at 6% interest (is the 6% for the life of the debt transferred or for a period of time), obviously that depends on the amount you are repaying off the debt each month.


Its also possible one or other may pull the balance transfer deal part way through your multiple transfers.


On the alternative method the cash advance fees and the fact that it would incur interest straight away would likely make this more expensive (and you may well have an overall limit for cash withdrawals on the capital one account).

Tomuk_2

True I was worried about them pulling the deal but Barclays said the 6% (well its 6.9% for the lift) is available for up to £10,000 total so I hope they wont pull it as I wont hit that and they will be gaining 3% when I transfer back.

I think it will work out cheaper long as I did my maths right!, ill be taking my interest down from 24% to 6.9%, it will cost me £240 to do it overall as the balance ill be moving is actually £3600.

My montly interest on the £3600 with barclays is 1.873% (not sure how this equates to 24% APR as I worked it out around 22.5% but either way..), so around £67 a month.

By time time I have done all the moving around, this 3600 will be on 0.53% (ish) which is £19 a month interest so every month ill save about 50 quid, so ill be better off within 5-6 months give or take.

I am currently paying the minimum, due to having a lower income right now so this balance will be remaining for a year or so at the very least!

Tomuk_2

well the fee is 3% from barclays to capital 1, and 2.5 the other way so lets say 3% each way to keep it easy, still quite a saving done you think?

The 3% fee is only a one off fee

thenudeone

Barclays BT deals are re-evaluated very quickly in the light of changed circumstances.
For example a deal may only appear for as long as you have more than X% of your limit remaining. As soon as you go over that limit by doing a BT, the deal will disappear.

Just something to be aware of.

onerickylambert

Barclays give you a 6% (ish give or take 1%) rate for all balances transfered to them so my question is, if I balance transfer £1000 to capital one, then transfer it back to Barclays and do this 4 times, will the full £4000 then be on the lower rate?.


Another way I thought i could do it is as my capital one has a 0 balance, I could take a cash advance for £1000, pay £1000 barclays, then transfer the £1000 on the capital one over to barclays and do this 4 times.. that would save me some money with the transfering as only half the transfers required...

Anything think of any issues with this idea which is a bit of a pain but i need a lower rate.

Actually you'd need to do it 5 times as you can only usually transfer 90% of your available credit (£900 a time). One thing you could try: Login to barclays and ask for a credit limit increase (assuming you haven't missed payments or had an increase in the last 6 months you should get it). Ask for £8000 new credit limit.

Then transfer £4000 (or as near as) FROM Capital One to Barclaycard putting you on the 6.9% lifetime deal for that £4k.

Then once complete you will have £4000 (or similar) credit on C1, so you can transfer £4000 FROM Barclaycard to Capital One and your Barclaycard is now on 6.9% and C1 still at zero (excluding BT fees). Should get you off the 22% a little bit quicker if you can get the credit limit increase.

:money:

JimmyTheWig

onerickylambert wrote: »

One thing you could try: Login to barclays and ask for a credit limit increase (assuming you haven't missed payments or had an increase in the last 6 months you should get it). Ask for £8000 new credit limit.

Then transfer £4000 (or as near as) FROM Capital One to Barclaycard putting you on the 6.9% lifetime deal for that £4k.

This puts you into the unknown territory of having a positive balance on your Capital One card for a while. Different card companies have different ways of dealing with this and they might reject the transfer but you would still charged the transfer fee from Barclaycard.

Would be better to get a bigger credit limit from Capital One, if that is possible.

onerickylambert

JimmyTheWig wrote: »

This puts you into the unknown territory of having a positive balance on your Capital One card for a while. Different card companies have different ways of dealing with this and they might reject the transfer but you would still charged the transfer fee from Barclaycard.

Would be better to get a bigger credit limit from Capital One, if that is possible.

If you transferred to a positive balance on C1 then the fee would be from C1. If they don't complete the balance transfer they shouldn't charge a fee (not to say they wouldn't).

I've done this with BC, C1 and M&S and never had a problem, but that's not to say it may not get flagged.

JimmyTheWig

onerickylambert wrote: »

If you transferred to a positive balance on C1 then the fee would be from C1.

I disagree.
Imagine the credit card companies did these transfers by writing cheques to each other. You pay the fee to the company who writes the cheque.
E.g. in the simple case you owe Capital One £1000. You ask Barclaycard to transfer the debt to them. Barclaycard write a cheque to Capital One for £1000. You pay Barclaycard a fee of, say, £30.

In the suggested case it would still be Barclaycard writing the cheque to Capital One, so the fee would still be paid to Barclaycard.

I'm not saying that it won't work. As you have proven, it probably will. But anyone else trying it needs to understand that credit cards are not designed to carry positive balances and that if the card company rejects it you may be out of pocket.

Mr_Goodkat

I would first either run the eligibility checker to see if you could get a 0% transfer deal elsewhere in the hope of getting a bigger limit than the £1k Cap One or speak to Cap One and ask for a limit increase.


The number of transfers and transfer fees plus the risk of offers getting removed at any time could leave you in not much better position.