Interest free balance transfers: One hidden cost to consider

tigertedd_2

Hi guys,

I've just balanced transferred a £1,500 NatWest credit card onto one of the new 32 month 0% BarclayCards, based not he advice here.

However, I've realised it turns out to be a false economy.

The minimum payment on the card is 2.25%, which is over twice what the minimum payment was on the NatWest card.

Granted, the minimum payment goes directly towards paying off the debt, so in the very long term, it is a good thing, it means, in 32 months, I've have that much less money to find. But in the short term, I now find myself having to pay an extra £15 per month towards my credit card, and I've now committed to that for the next 32 months!

It's actually a priority for me to keep my monthly costs as low as possible, so I would find it really helpful to know what the minimum payments are likely to be. The interest rate and transfer fee are well displayed, but I'm trying to find out the minimum payment on the MBNA card, for example, and you can't find it anywhere, until after you've applied, at which point, it's all the more difficult to apply for anything else, so you're stuck. But, based on my Virgin Credit card, I think the minimum payment would work out to be half as much. If I'd have known that, based on just one month's difference in the 0% period, I would have gone for the MBNA.

Therefore, Martin, I would request that you include the minimum payment amount on your breakdowns of credit cards, so that can be factored into the budgeting. Perhaps a simple calculator tool would be useful too.

Thanks

eskbanker

It's not really hidden though, is it - the minimum repayment on a Barclaycard is clearly published in the summary box on their website at http://www.barclaycard.co.uk/personal/platinum-longest-balance-transfer-summary

MBNA show their minimum repayment calculation at http://www.mbna.co.uk/help-faqs/

There is a simple MSE calculator tool here, although it's not card-specific if that's what you're looking for - MSE can't be expected to summarise every feature of every card and would naturally expect that people will do their own more detailed research before committing!

PeacefulWaters

I am beginning to find it tiresome how a buyer's failure to do a little bit of basic product research ends up being blamed on somebody else.

Although there is a nice bit of irony that it's Martin Lewis on the receiving end.

wellsy07

Hi, have also transferred a similar figure to my new barclaycard
And was paying tge minimum 25 on virgin / mbna

The 2.25% will actually mean we will start to pay lesser minimums once balance hits approx 1000 it will only be 22.50.......so actually better than mbna/virgin
Which would continue at 25 longer
I did my maths, plus help from good people on here but your actually better off
Plus 32 months of no switching fees!

Also we need to pay above minimum to avoid markers on files, so ovrr the average, its much better, in my opionion anyways

redcard

OP, you're moving debt around rather than paying it off. If an extra £15 puts you in so much difficulty then you need to re-evaluate how you deal with your finances.