Advice please, APR and PA?

Raerae85

Hello.

I am currently trying to pay off my credit card bill. I recently lost my job when they discovered I was pregnant. So this is making life a little difficult for me. I would like to get my card down to 0 so I have no outgoing bills, bar my mobile contract which is only cheap.

So, I am currently owing around £1,900 in total. My APR on this card is 19.9%. The interest this month came to £32.53, which meant after paying my min of just over £50, I have only really paid off £20 on my bill

So, this morning, I got a letter from my bank. I have an empty credit card with them that I was going to close. However, the letter states I can do a balance transfer of a low rate of 6.9% PA. Now, I am not all up and savvy on this sort of thing.

I have no idea on the difference. I was thinking of shifting part of the £1,900 to this card, say £500 of it. Would this lower my interest on my main credit card, and would this low rate PA make my payments work out better each month? I'm not overly sure if I am making much sense to be honest.

Basically, am I better off splitting the debt and making 2 payments to 2 cards, of am I better off sticking with the 1 lump sum?

Thanks for your time in this. Any help or advice would be most appreciated. I am aware that I may come off as a bit of a fool!

Nasqueron

Ring up immediately before you start getting into problems with payment and see if they can offer you a 0% balance transfer card if you ask nicely.

I suspect if you are unemployed you won't get very far with a new BT card unfortunately.

Are you suing the old company for unfair dismissal?

[Deleted User]

BT as much as you can to the card with the 6.9% offer. How long does the offer run for?

eskbanker

In general, paying interest at 6.9% APR is clearly better than paying 19.9%, so get as much onto the lower rate as possible, bearing in mind that you should also (a) look closely at the Ts & Cs of both cards to understand minimum monthly payment calculations (the lower APR may have a higher minimum payment calculation) and (b) check the balance transfer fee.

CLAPTON

Raerae85 wrote: »

Hello.

I am currently trying to pay off my credit card bill. I recently lost my job when they discovered I was pregnant. So this is making life a little difficult for me. I would like to get my card down to 0 so I have no outgoing bills, bar my mobile contract which is only cheap.

So, I am currently owing around £1,900 in total. My APR on this card is 19.9%. The interest this month came to £32.53, which meant after paying my min of just over £50, I have only really paid off £20 on my bill

So, this morning, I got a letter from my bank. I have an empty credit card with them that I was going to close. However, the letter states I can do a balance transfer of a low rate of 6.9% PA. Now, I am not all up and savvy on this sort of thing.

I have no idea on the difference. I was thinking of shifting part of the £1,900 to this card, say £500 of it. Would this lower my interest on my main credit card, and would this low rate PA make my payments work out better each month? I'm not overly sure if I am making much sense to be honest.

Basically, am I better off splitting the debt and making 2 payments to 2 cards, of am I better off sticking with the 1 lump sum?

Thanks for your time in this. Any help or advice would be most appreciated. I am aware that I may come off as a bit of a fool!

presumably there is a BT fee?


however it would seem a good thing to transfer as much as possible from the 32% card to the 6% card




once done, then pay as much as possible each month on the card charging 32% and just a little over the minimum on the 6% card

Aquamania

Raerae85 wrote: »

Hello.

I am currently trying to pay off my credit card bill. I recently lost my job when they discovered I was pregnant. So this is making life a little difficult for me. I would like to get my card down to 0 so I have no outgoing bills, bar my mobile contract which is only cheap.

So, I am currently owing around £1,900 in total. My APR on this card is 19.9%. The interest this month came to £32.53, which meant after paying my min of just over £50, I have only really paid off £20 on my bill

So, this morning, I got a letter from my bank. I have an empty credit card with them that I was going to close. However, the letter states I can do a balance transfer of a low rate of 6.9% PA. Now, I am not all up and savvy on this sort of thing.

I have no idea on the difference. I was thinking of shifting part of the £1,900 to this card, say £500 of it. Would this lower my interest on my main credit card, and would this low rate PA make my payments work out better each month? I'm not overly sure if I am making much sense to be honest.

Basically, am I better off splitting the debt and making 2 payments to 2 cards, of am I better off sticking with the 1 lump sum?

Thanks for your time in this. Any help or advice would be most appreciated. I am aware that I may come off as a bit of a fool!

You'd be better off shifting as much as you can to the lower rate card if you need time to pay it all off.

Be aware that there is also possibly/probably a one off admin fee for a BT (usually about 3%) ... double check this.

Whether or not it reduces (or even possibly increases!) your monthly payments depends on minimum monthly payment terms on the lower rate card. Check the terms.
If there is still some left on the original card (e.g. because you don't have sufficient credit balance to put it all on the lower rate card) remember you will need to pay the minimum monthly figure on the existing card too.

InsideInsurance

APR is a defined thing, its the effective interest rate of borrowing £1,200 for 12 months factoring in all interest, fees, charges etc.

PA interest is only the interest, it excludes any fees etc and may or may not be the compound rate.

If there are no fees involved then PA and APR will be fairly close to each other but you get cards like the Virgin Atlantic Black which has a 18.9% PA but a 52.0% APR due to the £140 annual fee

Raerae85

Thanks for the help. There is no balance transfer fee for the 6.9% PA. The offer to move with no fee runs out at the end of this month. Any transfers made after the end of the month would be at the standard transfer rate in my card agreement.

I am also talking to the CAB about my work issues.

CKhalvashi

Raerae85 wrote: »

Thanks for the help. There is no balance transfer fee for the 6.9% PA. The offer to move with no fee runs out at the end of this month. Any transfers made after the end of the month would be at the standard transfer rate in my card agreement.

I am also talking to the CAB about my work issues.

I'd transfer as much as possible then.

Their computer system has probably detected that you're not using the card, have debt elsewhere, and is trying to make some money from you on this basis.

If possible, try to pay the £50-odd each month, to get the balance down quicker