Transferring to a card with debt already on.

f0xsplit

I am considering transferring balances to my 0% barclaycard but I already have a little debt on the card which I am paying interest on. I have researched on the barclaycard website but would just like to clarify, will the old (higher interest) debt be cleared first when I make payments before the 0% transfers are?

Thanks for any advice on this.

jonesMUFCforever

As a general rule not a good idea to mix balance transfers and existing debt.
Any other cards you can use or apply for?

grumbler

jonesMUFCforever wrote: »

As a general rule not a good idea to mix balance transfers and existing debt.

I don't see any serious problems.
Problems arise when you mix 0% BT with purchases.

jonesMUFCforever

grumbler wrote: »

I don't see any serious problems.
Problems arise when you mix 0% BT with purchases.

OP does not make it clear whether the existing debt is purchases or not. I prefer to keep my BT 's separate from any other transactions.

msallen

It doesn't matter whether the existing debt is a purchase or not. The salient facts are it is already on the card and is attracting interest.

OP - yes the debt attracting the higher interest will be paid off first.

Pincher

Up to a few years ago, the credit card company would pay off the 0% Balance first, so they can charge you lots of interest on the purchase debt, but the regulators put a stop to that.


Under the current regime, Paying for daily items will let you get maximum benefit from the Balance Transfer.


If you had a 12 month 0% BT deal on £5000, you don't have £5,000 for 12 months. If the monthly minimum payment is £100, You have £3,900 at the end. In contrast, if you spend £100 a month, and pay in £100 a month, the balance is still £5,000 at the end.


For the people who have no debt, it is actually a chore to create a balance for transfer in the first place. It is quite annoying to see all that balance you built-up being eroded by the minimum payment.


If you were the kind of person who stray into Pay Day loan territory, and pay hundreds for tiny amounts, it's better to pay a 3% Fee on say £1,000 (£30 out), keep it going card to card, and use the cash in a deposit account earning 1% (£10 in). So, you end up paying £20 a year for having a £1,000 slush fund. The monthly repayments will provide a positive credit history, too.

f0xsplit

Fantastic, thanks for this. I want to transfer all my other little amounts to my 0% barclaycard then pay massive chunks off one card per month!

LuSiVe

The problem arises when you have a 0% interest balance on the card and *then* make purchases. As you are not paying the entire balance off every month, those purchases will attract interest from the day of purchase - there will be no interest-free period. This is what people usually end up complaining about.

You're already paying interest, so I don't think there will be a problem.

Pincher

LuSiVe wrote: »

The problem arises when you have a 0% interest balance on the card and *then* make purchases. As you are not paying the entire balance off every month, those purchases will attract interest from the day of purchase - there will be no interest-free period. This is what people usually end up complaining about.

You're already paying interest, so I don't think there will be a problem.

Cash advance attracts interest immediately, but purchases have an interest free period typically quoted as "up to 54 days".




If you have a £1,000 0% BT, and then you spend £100 on groceries and petrol, the minimum payment would be something like £30. If you pay £100, on time, there is no interest.

Mr_Goodkat

Pincher wrote: »

Up to a few years ago, the credit card company would pay off the 0% Balance first, so they can charge you lots of interest on the purchase debt, but the regulators put a stop to that.


Under the current regime, Paying for daily items will let you get maximum benefit from the Balance Transfer.


If you had a 12 month 0% BT deal on £5000, you don't have £5,000 for 12 months. If the monthly minimum payment is £100, You have £3,900 at the end. In contrast, if you spend £100 a month, and pay in £100 a month, the balance is still £5,000 at the end.


For the people who have no debt, it is actually a chore to create a balance for transfer in the first place. It is quite annoying to see all that balance you built-up being eroded by the minimum payment.


If you were the kind of person who stray into Pay Day loan territory, and pay hundreds for tiny amounts, it's better to pay a 3% Fee on say £1,000 (£30 out), keep it going card to card, and use the cash in a deposit account earning 1% (£10 in). So, you end up paying £20 a year for having a £1,000 slush fund. The monthly repayments will provide a positive credit history, too.

This really was robbery when credit card companies would reduce the balances with the lowest interest rate first! Old habits die hard so I always transfer a balance to a 0% card with a nil balance and don't use it again until the balance is cleared.


With the current regulations regarding allocation of payments it won't cause a problem to the OP guess the only thing to be aware of is there will be some trailing interest the following month when the interest bearing balance is paid off.

thenudeone

msallen wrote: »

It doesn't matter whether the existing debt is a purchase or not. The salient facts are it is already on the card and is attracting interest.

OP - yes the debt attracting the higher interest will be paid off first.

Agreed.
Whether the existing debt is for purchases or transfers is completely irrelevant.