1.9% money transfer cash to AC offer from Barclaycard

adindas

I just got an offer from Barclaycard
- Transfer cash to current account
- 0% interest until Feb 2015
- 1.9% fee applies
- My limit is only £3000 (unfortunately)
- I currently still have a container in 3% interest current account.
- Presumably 0.5% net profit interest for about four months (0.333 year)

Suppose I transfer £3000 to my current account. Profit will be
- In tern of cash 0.333*0.005*3000 = £4.99 (not really worthy)

But I am thinking to capitalize this by
- Transferring to Zero BT to Lloyds Platinum for 24 months for 1.5% fee here:
http://www.lloydsbank.com/credit-cards/all-cards.asp?WT.mc_id=MUL0211SGOO01&WT.srch=1
- SO here again another profit of 0.5% per year for 24 months e.g 2*0.005*3000 = £30

I could try to double profit by by trying to negotiate to increase my limit in Barclay to £6000-£7000 (say). I believe I could get credit limit with Lloyds of £6000 but nit sure about Barclay card since probably they are aware of the disadvantageous for them to increase my limit with this offer.

My question is :
1. What of my assumption above do you think is irrational ?
2. Apart from about 20 minutes phone call effort in both side work (Barclaycard and Lloyds), what do you think other work I have not taken into account ?

Thank you for your time

YorkshireBoy

adindas wrote: »

Profit will be
- In tern of cash 0.333*0.005*3000 = £4.99 (not really worthy)

You'll make a loss!...

Stoozing Profit Prediction

Data entered by the user
Balance to be transferred (pounds)...... 2700
BT card interest rate (%) .............. 0
Introductory period (months) ........... 5
Balance Transfer Fee (%) ............... 1.9
Maximum BT Fee (pounds)................. No Maximum
Min Monthly Payment Type ............... Percentage
Min Monthly Payment Amount (% or pds) .. 2.25
Savings interest rate (AER %) .......... 3
Tax rate ............................... Basic Rate

Your Results
Balance Transfer Fee paid (pounds)...... 51.3
Stooz pot balance at end of intro ...... 2436.06
Credit card balance at end of intro .... 2455.4
Gross Profit before tax on interest .... -19.34
Tax on interest to be paid ............. 6.39
Your Profit (pounds).................... -25.73

Created using the Stoozing Calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission.

Very hard to make a worthwhile profit these days by 'fast-stoozing', when you're up against BT fees (even small ones) and low interest rates on savings accounts.


That said, I'm still hanging on to a £25K limit with Virgin just in case things change!

YorkshireBoy

adindas wrote: »

I understand 1.9% fee is prorata, so the fee should be 1/3*1.9% = 0.627% for four months only. But I might be wrong. I will need to check it with Barclay

In all my 9 years + of stoozing I've never heard of a "pro rata" BT fee.

thebritishbloke

Another note. You'd be better off opening up two Classic Plus TSB accounts, which pay 5% (Gross) interest each for balances up to £2,000. You'd net a profit of about £55 for putting £2700 in these (if you pay no tax on interest).

Might be worth using BarclayCard's online credit limit increase system first, see if you can bump it up a couple of thousand. You'll have to double check this, but I'm pretty sure they (BarclayCard) don't perform a credit check for limit increases.

thebritishbloke

adindas wrote: »

Thanks. Good advice. Indeed I already have 2 x £2000 in two of my TSB plus ..

Have you already got a Nationwide FlexDirect account too?

Kraftskiva

I took Barclaycard up on this offer today as I'm moving flat shortly and £2000 interest free til May would be ideal for the rental deposit - saves withdrawing from this year's ISA allowance. I have a cunning plan so that with a bit more work another bank will be paying for the £38 fee it's costing me. Paying off the £2k in the next few months out of salary is not a problem.

As I didn't get the offer letter for the current account cash transfer, (it just appeared online) I opened a basic Barclays current account to transfer it into - as they allow you to even without the code - and from there on to my normal current account. My plan is sometime in the next few months to switch the Barclays current account (after setting up a couple of DDs) to Halifax and get the £100 switching bonus.

That pays for the £38 fee and gives me £62 in my pocket. :beer:

adindas

How much fee you need to pay ?
For hoe long?
What are you going to do with this £2000 e.g. either Stoozing or to pay higher interest debt, loan credit card ?

Kraftskiva wrote: »

I took Barclaycard up on this offer today as I'm moving flat shortly and £2000 interest free til May would be ideal for the rental deposit - saves withdrawing from this year's ISA allowance. I have a cunning plan so that with a bit more work another bank will be paying for the £38 fee it's costing me. Paying off the £2k in the next few months out of salary is not a problem.

As I didn't get the offer letter for the current account cash transfer, (it just appeared online) I opened a basic Barclays current account to transfer it into - as they allow you to even without the code - and from there on to my normal current account. My plan is sometime in the next few months to switch the Barclays current account (after setting up a couple of DDs) to Halifax and get the £100 switching bonus.

That pays for the £38 fee and gives me £62 in my pocket. :beer:

Kraftskiva

adindas wrote: »

How much fee you need to pay ?
For hoe long?
What are you going to do with this £2000 e.g. either Stoozing or to pay higher interest debt, loan credit card ?

I don't have any other debt - this £2000 provides me with a lump sum for my rental deposit without having to touch my savings.

Imagine I'll probably pay it off over the nine months, though I guess I could save that money in a 5% current account, pay the minimum each month and then pay it off at the end of the 0% period.

adindas

Kraftskiva wrote: »

I don't have any other debt - this £2000 provides me with a lump sum for my rental deposit without having to touch my savings.

Imagine I'll probably pay it off over the nine months, though I guess I could save that money in a 5% current account, pay the minimum each month and then pay it off at the end of the 0% period.

For a basic tax payers, net interest is 0.8*5%= 4%.

Given that you get 1.9% FOR ONE YEAR. yes you will make profit of around 2.1%*2000.

But if 1.9% fee is just until February 2005 e.g. for 5 month, this will equate 12/5*1.9 = 4.56% pa

You will make a loss of around 0.56%x£2000.

For the above calculation the small impact of minimum payment has not been taken into consideration.

Kraftskiva

adindas wrote: »

For a basic tax payers, net interest is 0.8*5%= 4%.

Given that you get 1.9% FOR ONE YEAR. yes you will make profit of around 2.1%*2000.

But if 1.9% fee is just until February 2005 e.g. for 5 month, this will equate 12/5*1.9 = 4.56% pa

You will make a loss of around 0.56%x£2000.

For the above calculation the small impact of minimum payment has not been taken into consideration.

Considering that as you will read above I will have covered the fee by switching the current account I will not be making a loss. If I wasn't doing so then you would be correct. The interest free period is 9 months anyway - to May 2015.