Barclaycard "Transfer cash to bank account" offer

Yorlasty

Hi there,

Probably basic question but I'm looking to understand exact savings I will be making here.

Have loan in Santander at 4.3% APR for another 3 years and 9 months.

Barclaycard offered me recently option to transfer free balance from my credit card (5,5k limit) to my bank account with one time fee 1.9%. Interest free period until 1st of June 2015 (10 months approx).

I have also Lloyds cc with balance transfer offers which I could use to move balance from Barclays at the end of the term to have it keep going at 0% (fee would be 3% - 6 months terms currently but this can change - seen 12 months offer in the past).

Question is - how to best calculate saving in ££ or %% per month assuming that I would move 4000 to Barclays for 10 months and then to Lloyds for 6 months.

Much appreciate your help guys.

Regards,

If I would transfer

chattychappy

To be frank, all these rates are relatively low. So even if you were offered 0% for life without a fee, you'd still only save 4.3%/a year. But of course, that would still be worth doing!

There is something to be said for sticking with your existing loan. Afterall, you are "guaranteed" that line of credit. All the credit card offers have shorter expiries. When do you think you could repay the loan?

That aside, because of the rates are relatively low we, the effects of compounding are slight - so for these calculations I'll ignore them.

Barclaycard charge 1.9% over 10 months. That is roughly equivalent to 2.3% over a year. But the fee is charged on the initial balance, so the APR is higher because the balance is declining as you pay it. The exact APR depends how much you repay. But if you paid off half the balance during the 10 months, then the APR would be around 3%.

The Lloyds deal is pretty poor at 3% for 6 months. Without allowing for repayments, that would be an APR of 6% or so. But as you are repaying, the APR is higher. This is worse than what you have with Santander already.

Personally I'm always getting offers. If I were you, I'd look for a new card with a longer BT deal (that allows money transfers - tricky perhaps) so there is a little more security. Else I probably wouldn't take the Barclaycard deal for fear that a small saving could be blown away by not having anywhere to transfer it to. Unless, of course, I thought I could pay it off within a short time.

Perhaps look at a 0% purchase card? Then you can divert payments you would otherwise make to paying off Santander?