Quickest/best way to clear two c/cards

djdestiny

Hi, I've joined up to get some 2nd opinions and advice on which way to go next. I just want to make sure I'm doing the right thing before doing something that could make things worse!

I have two credit cards:

Capital One
Credit limit: £4000
Current balance: £3285
Current minimum payment per month: £141
Current amount I'm paying off: £40 per week
Next months estimated interest: £91
Standard purchase APR: 34.080%
Cash APR: 33.970%
Standard B.T: 34.080%

Barclaycard
Credit limit: £3580
Current balance: £1263
Current minimum payment per month: £37
Current amount I'm paying off: £35 per week
Next months estimated interest: £28
Standard purchase APR: 23%
Cash APR: 23%
Standard B.T: ?

Obviously the Capital One card is hammering me on interest, especially as due to an unavoidable situation I had to draw some cash on it and that interest is not going to stop being paid until I've cleared the balance (what a bloody con!)
I am fully aware of the issues it can cause drawing cash and didn't want to do it, but whats done is done. Now I want to sort it and get it all cleared!

Initially, my goal has been to carry on as I am, and get the Barclaycard paid off as quick as I can and not use it at all. Once that is at £0 I would swap the payment to the Capital One card and be paying £75 per week. My logic being that would help clear it quicker and it would snowball as the balance/interest amounts drop.

However, now I just started to take notice of 0% transfers as an offer popped up on my account for my Barclaycard.
Am I right in thinking that if I cleared my Barclaycard and then took the offer to transfer as much balance as I could (hopefully all of it!) from my Capital One card I could then take advance of the 0% interest for the length of the offer (currently its a 6 month one, but might change by the time I've cleared the card)
I know I wouldn't be able to clear all of the transfer in the 6 month offer period, but after that would then be paying 23% APR on what remains rather than paying 34%! (I will be closing the Capital One account once its clear)

My further thoughts are:
1)The fee for doing the transfer is showing as 2.90% or £2.90 minimum. Does that get added onto the balance of the card I have transferred it to?
2)On my Capital One card it lists "Standard B.T: 34.080%" on my monthly statement.
Is this only relevant if I was to transfer a balance onto that card, not from it?

Thank you in advance for any advice/tips/help

Paully232000

Assuming you cant get another card to BT to, then what you are thinking appears sensible, getting as much as you can onto the lower interest rate of Barclays or their 0% offer.

I am assuming, somehow, you are planning on paying off your barclaycard quickly??

Also, 1) yes the fee gets added to the card balance that you transfer to, in your case barclays, so they should tell you how much you can transfer taking into consideration the fee, I am sure for my barclaycard it is 90% of the available credit limit.

2) this APR is the rate you would pay on any BT to the capital one card as their is no promo rate, is just their standard APR.

djdestiny

Excellent, thanks for that.
Another option I forgot to mention was to get a 3rd card with a decent offer on 0% and do a BT to that, however I very much doubt I would be able to get a new card with enough balance to transfer what is owning on the Capital One card, so I might as well use the Barclaycard, as by the time I have cleared its current balance my Capital One balance will hopefully be low enough to transfer in one go.

Yes, I am planning on clearing the Barclaycard balance ASAP with any spare chunks of cash and maybe selling some items to help get it paid off.
I am seeing getting the Barclaycard to zero as my current and biggest goal, as then I can transfer to 0% and start getting rid of the Capital One balance.
Having 0% and paying £75 (and a little more when possible) I hope to be able to get it reduced fairly quickly.
Even if I only managed the £75 per week, in 6 months that would reduce it by £1800 (assuming they're all 4 week months).
What ever balance is left after that would be quite easy to chip away at having the lower Barclaycard interest rate!

I'm REALLY looking forward to ringing up to cancel and close my account for the Capital One card once its cleared

Paully232000

Having thought about it a bit more, and based on what you have said i would, assuming you cant get another card:

Transfer from Cap 1 to Barclaycard whatever you can onto the 0% offer

Use all your spare money to pay down the rest of the Cap 1 card as this is attracting the highest interest rate, whilst paying the min to Barclaycard.

When cap 1 is at £0, start paying as much as possible to barclays.

Someone may disagree but that, on second thought, is what i would do.

msallen

Agree with what Paully said...

Assuming you don't get another 0% BT card (but even if you didn't get one for the whole amount, any amount would be useful)...

You don't need to wait until you have cleared the Barclaycard. Transfer what you can now from CapOne to Barclaycard, then just make minimum payments on Barclaycard, paying any extra you can afford off the highest interest debt, i.e. CapOne.

djdestiny

Am I right in thinking that if I did the above (which makes perfect sense), would be minimum payments to barclaycard be based on what is on the balance currently and not include the transferred amount?
So for example, my current minimum being £37 even though I will of maxed out the card by filling it up with the transfer?

If I was able to transfer 2k for arguement sake, it would leave me with 1.2k on the Capital one card to clear, which should be attract a fair bit less interest than it currently is!

redpete

djdestiny wrote: »

Obviously the Capital One card is hammering me on interest, especially as due to an unavoidable situation I had to draw some cash on it and that interest is not going to stop being paid until I've cleared the balance (what a bloody con!)

Not sure what your problem is with this - the cash advance interest is lower than the rest so why shouldn't it remain until you clear the balance?

Initially, my goal has been to carry on as I am, and get the Barclaycard paid off as quick as I can and not use it at all.

I don't get this either - you should pay off any surplus off the card attracting the highest interest rate, i.e. Capital 1, then when that is clear move the surplus to the Barclaycard.

would be minimum payments to barclaycard be based on what is on the balance currently and not include the transferred amount?

Minimum payments are calculated on the total balance, include any balance transfers.

Paully232000

djdestiny wrote: »

Am I right in thinking that if I did the above (which makes perfect sense), would be minimum payments to barclaycard be based on what is on the balance currently and not include the transferred amount?
So for example, my current minimum being £37 even though I will of maxed out the card by filling it up with the transfer?

If I was able to transfer 2k for arguement sake, it would leave me with 1.2k on the Capital one card to clear, which should be attract a fair bit less interest than it currently is!

Based on my rough calculations you should be able to transfer about £1900 from cap 1 to barclays.

Your cap 1 min payment would go down and your barclaycard min payment would go up to (if it is the same as mine) 2.25% of the new balance including the amount you transferred (approx £71/month).

However, importantly, overall, the amount of interest you would be paying would be less as you are currently paying 34% on Cap 1, and you are moving 1900 (ish) of this to 0%.

Hope that makes sense.

djdestiny

redpete wrote: »

Not sure what your problem is with this - the cash advance interest is lower than the rest so why shouldn't it remain until you clear the balance?

It frustrates the hell out of me because I'm paying approx £30 a month interest for the cash withdrawal, and I only took out about £40 in the first place!
That will keep being charged until I clear the balance, which to me is daylight robbery, I've paid back way over the amount I took out in cash

enjoyyourshoes

Hi djdestiny

you possibly do not want to hear this:-

There were very good reasons why you got CC No 1 and you probably had very good intensions on how you were going to use it ?

This was probably exactly the same with CC No2 ?

There is a quote 'If you always do what you always do, you will always get what you always get.

I suggest you start doing something different with your finances. Stop spending and work out your strategy (currently you are dealing with short term tactics with no eye for the future).

Here are some ideas on financial strategy:-

1. Have a clear objective (specific, measurable, achievable, realistic & time-bound)

2.Understand your total annualised costs & savings (to meet your objectives) (i.e. do a budget or similar) & ensure this is LESS than incoming money. (if not do a review to allocate LESS than income)
(DONT forget to include Christmas, Holidays, Birthdays, Savings, clothes etc as well as the boring stuff)

3. Break budget into two part (part one: monthly costs) (part two: 1/4ly ; 1/2LY & annualised bills. This annualised £'s should be divided by 12 to produce a monthly cost to save for these bills. Can do a cash flow to ensure monthly savings pot has enough £ to pay allocated Bills on the estimated months they become due)

4.Produce a monthly reconciliation which has your income LESS all your costs (including the monthly savings described above), Cash withdrawals, monthly DD & SO, cheques cashed, credit card purchases & savings (linked to your objectives). Do this reconciliation daily and ensure you spend LESS than income.

5. If you dont deduct credit card payments off your monthly income then you will not have the £'s to repay and thus end up in DEBT.

5. Put your monthly savings into a high interest account and track allocated savings against costs. Also DONT PAY insurances by monthly credit agreement pay them annually.

6. Get online access for your current and other accounts so you can see your separate reconciliation is accurate and moving monies is less hassle on line

7. Produce Excel docs to assist or do it manually.

Paully232000

djdestiny wrote: »

It frustrates the hell out of me because I'm paying approx £30 a month interest for the cash withdrawal, and I only took out about £40 in the first place!
That will keep being charged until I clear the balance, which to me is daylight robbery, I've paid back way over the amount I took out in cash

That is not the case, you are paying about £1.33/month on the £40 you took out as a cash advance, and as the cash advance % is less than the normal % (which is unusual to say the least) it will never be paid off until you pay off the rest as CCs pay the amounts that are attracting the highest interest first.