Basic balance transfer fee question

redrabbit29

I have £2283.73 on a Virgin Credit card which is being paid off and should be gone in about 4-5 months.

I'm being charged 1.3852% interest I believe, as this is what it says on the account page.

The last interest amount was £20.

Is it worth balance transferring this considering there will be fees applied?

This will be paid within 4-5 months as stated, whether I transfer or not, there is no danger of me transferring to 0% and ignoring it.

Thanks,
RR

YorkshireBoy

Assuming you pay the remaining balance off linearly, and much rounding has been made by me(!), over the next 5 months you'll pay...

5 x 1.3852% x £1,100 in interest (£1,100 is the average balance)

That's £76.18 as a monetary value

£76.18 / £2,283.73 is 3.34%

So can you get a BT with a fee of less than 3.34%? And if you can is it worth the hassle...bearing in mind the saving will be small? Then again, it might be worth it if your 4-5 month timescale turns out to be a tad optimistic.

eskbanker

The links further up the page show that BT fees are typically in 1.5-3% territory so it shouldn't take long for a BT to pay off given how fees like that compare with your monthly interest. Having said that, your maths don't seem to stack up, a 1.3852% interest fee on £2283.73 is £31.63 so something isn't right here!

Edit: as YB says in previous post, factoring in the reducing balance does change things a bit!

YorkshireBoy

eskbanker wrote: »

your maths don't seem to stack up, a 1.3852% interest fee on £2283.73 is £31.63 so something isn't right here!

Possibly some additional spending since the last statement?