Credit Card Consolidation

jellybeanbaker79

Hi


I was wondering if its worth me consolidating my next account, current total outstanding £525.07 with last months interest 11.50% so min monthly payment is £49.95 and a asda credit card total amount outstanding of £1,348.35 with last months interest of 20.92 so a min monthly payment was £43, my question is would it be beneficial to me to pay the next account off with my asda card and just pay on lot of interest. But obviously not spend on the next account until things have paid off

Foxy-Stoat_3

Depends on the interest rate on your Asda card.

stator

You can't pay off one credit card with another. If you can balance transfer from the more expensive to the cheaper one it might help, but there is usually a fee so it depends how long it will take you to clear.
If you can get an interest free balance transfer card that would help.
If not pay off the minimum payment on both and then overpay the one with the highest interest

grumbler

foxy-stoat wrote: »

depends on the interest rate on your asda card.

~20% APR judging by 20.92 and 1348.

And it's a mystery what the OP means by "last months interest 11.50%".
For this card monthly interest can't that high. Even the monthly payment was below 10% and it couldn't be smaller than the interest.

Financial education in our schools really needs some improvements.

molynda

I'm guessing it should have been £11.50 and not 11.5%

Anyway, as a rough guide to obtain your APR:

• NEXT: £11.50 interest charged divided by your balance of £525.07 equals 0.022 (2.2%) monthly interest. Multiply by 12 to get your APR, which equals 26.2%
• ASDA: £20.92 / £1348.35 * 12 = 18.6% APR

The above is rough only and I would use if you can't find your contract but ideally contact your creditor for the exact APR (e.g. I have a NEXT account and I believe rate is 24.99% APR)

You can pay off your NEXT account using a credit card so no need for balance transfer fees. Given ASDA only want £43 min payment on £1348, compared to NEXT wanting £50 on £525, you would appear to have lower capital payments on your ASDA card (3% ASDA vs 10% NEXT). In summary, you would be better paying off NEXT using your ASDA card then paying c£90 a month to ASDA whilst not spending on NEXT. This would reduce your balance faster and give you flexibility to reduce your £90 payment occasionally if you're having a tight month.

However, be warned that if you pay the NEXT balance with the ASDA card and proceed to make the ASDA min payments then it will take you much longer to pay off the balance and will cost more (because you're making a smaller dent in the total balance after interest - 3% ASDA vs 10% NEXT). Also, are you confident you won't spend on the NEXT account - can you close it down as an alternative to make sure you don't spend?

Hope this helps

stator

Oh, NEXT as in the clothing store?

jellybeanbaker79

Hi, thanks for the comments everyone, I think I will pay my next account off with my asda card as I normally pay each month 250-350 a month off the asda card anyway so I don't make the min payment.