Best way to pay off credit card?

mikeopvc

Hi I'm a bit confused as to which way round I should pay off a credit card.

I want to pay off my halifax card in full and close the account, the current balance is £5,400

I have a credit limit of £11,000 on my virgin card with a current balance of £4,163 which is at the full rate of 29.95%
I have a promotion offer for the virgin card of 10.9% until september 2015 with a transfer fee of 5%

I have a new mbna card with a credit limit of £3,300 and a 0% rate for 18 months with a 2.99% fee

Which way round do I do it?
Do I use the virgin credit to pay off the halifax card then use the mbna credit to reduce the virgin card balance or do I use the mbna credit and some of the virgin credit to pay off the halifax card?

Confused with all the rates:o

Any advice much appreciated

thebritishbloke

What's the APR on your Halifax card? Best way would be to move as much debt from the highest interest card on to the 0% deal. Have you thought about trying to apply for a 0% BarclayCard (or other provider) too? Even if they only give you a £1,000 limit, that's £1,000 more at 0%.

I have a feeling that the Virgin offer might end up meaning an APR of over 19% anyway, which isn't very good. Your best bet for the minute is to try and apply for another BT card and come back

mikeopvc

To be honest the halifax account is already closed and the 0% rate expires at the end of this month, then it'll revert to the standard rate until it's paid off so I intend to get rid of it before that happens, This is why Iv'e got the new mbna card to help clear the halifax card.

Not sure what you mean about the virgin offer ending up meaning an APR of 19% as the offer says 10.9% until september 2015

I don't really want to apply for any other cards right now I just need to know the best way to pay off the halifax card with what I have available?

Thanks

Foxy-Stoat_3

Use the MBNA and pay off £2900 off your Halifax and use Virgin to pay the difference, £2500.

thebritishbloke

It may work out more expensive to transfer on to the Virgin card, simply because of the high fee for transferring.

They're charging you 5%. So lets say you transfer £3,000 to MBNA and the other £2,400 to Virgin.

£2,400 * 0.05 = £120 Fee for transferring
Lets say you make 12 equal payments of ~£200 a month towards this debt. You'd end up paying ~£130 in interest at 10.9%
That's a total cost of £250-270 interest (you'll pay it off a couple of months after the 10.9% rate ends, it'd cost about £230 if you pay it off within the 12 months).

Now I'm going to guess your Halifax card is at 18.9%, if you just kept the £2,400 on that card you'd pay ~£220 in interest. If you want to see how these figures are calculated, just google credit card interest calculator, there's lots of different ones to use.

Basically, you would actually save money by not transferring it over to Virgin. Is there a particular reason you don't want to try to apply for another balance transfer card?