Quickest/best way to clear two c/cards

jamesd

Card providers are supposed to deduct payments from the highest interest rate part of a balance first. Barclaycard will do this. This means that you can safely use their 0% balance transfer offer immediately and your normal payments will first go to clearing the balance on which you're paying interest, not the 0% deal. You will see the various types shown individually on your statements, with the BT clearly identified.

So use the Barclaycard BT and the other card BT to reduce the Capital One balance as much as possible and continue paying more to clear the Capital One balance as rapidly as you can.

You should pay extra on the Capital One card because it has the highest interest rate.

No need to close the Capital One card once it is cleared. Use it minimally and have it paint a nice on time payment record on your credit file. The unused balance will reduce your use of existing credit and may actually help you to get another card. or not, it depends on many things including how your total credit available is related to your income.

djdestiny

Enjoyyourshoes, thanks for the advice but I am not in a position where I need to worry about all that.
My outgoings are comfortably below my income etc.
I certainly wouldn't be able to pay £75 a WEEK if that was not the case!
I am NOT spending on my cards and not reliant on paying for things with them and getting further into debt. The debt was built up on them due to some big unexpected bills when my relationship ended.

Basically, I have been too complacent regarding getting them paid off, I set up a standing order for each and let it tick over without paying too much attention to them.
Now I am giving them my full attention and getting them paid off ASAP, which is why I asked originally what the quickest way would be to do it

djdestiny

Paully232000 wrote: »

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.

It IS the case! Every month on my statement there are two separate lines, for example, these are my last three statements.
(I tried to link to scans of each part showing them but it won't let me post links as I'm a new user)

November
Standard purchase interest: £62.50
Standard cash interest: £33.27

October
Standard purchase interest: £62.49
Standard cash interest: £31.33

September
Standard purchase interest: £64.39
Standard cash interest: £31.46

I rang them to question this months ago, and was told that the interest would not stop being taken until I had cleared the normal balance, THEN the cash would be repaid and the interest stop. As I said before, it is daylight robbery, and I WILL close this account and never use Capital One again simply because of this reason.

You say it is unusual for the cash % being lower, I disagree.
They have done it for this exact reason! So that if you have a normal balance and take out cash, they know they can continue to rob you blind via interest on the cash until you clear the bigger balance.
It is a loophole they have created to make you may more interest because they know it will take longer to pay back the bigger balance, but in the eyes of the law they are doing no wrong because they are putting your payments towards the higher % interest rate!

djdestiny

Paully232000 wrote: »

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.

I don't understand this. Why would my Barclaycard minimum payment go up if I did a 0% BT onto it?

For example, if I have a balance of £1000 on the card and I 0% BT £2000 onto it my balance is now £3000.
Surely I should only be paying the minimum payment on the £1000 as the rest isn't getting any interest?
Maybe I'm looking at it wrong...

djdestiny

Anyway, going forward...
I am going to ring Barclaycard later today to see about getting a 0% BT from Capital One for as much as I can

codger8

Hello.Just to advise on the new 1.5% balance tranfer on barclaycard.If you go though the cashback site you will get £27 with them,Thanks,colyn

jamesd

djdestiny wrote: »

November
Standard purchase interest: £62.50
Standard cash interest: £33.27

Those numbers mean that much more than just £40 is classed as cash. Other things that are normally classed as cash include buying foreign currency and some gambling and gaming site purchases. Cashback at a supermarket also. A range of other things. To find out how you got the higher cash balance you could phone them and ask them to tell you the cash balance and which transactions led to that balance.

djdestiny wrote: »

So that if you have a normal balance and take out cash, they know they can continue to rob you blind via interest on the cash until you clear the bigger balance.

They aren't robbing you blind based on the APR. They are charging you a lower APR for the cash part of the balance so it is correct for them to clear the other part first. The problem is almost certainly just that you didn't know that some types of transaction are classed as cash. If you call them you should be able to find out which of your transactions those are.

djdestiny wrote: »

I don't understand this. Why would my Barclaycard minimum payment go up if I did a 0% BT onto it?

For example, if I have a balance of £1000 on the card and I 0% BT £2000 onto it my balance is now £3000.
Surely I should only be paying the minimum payment on the £1000 as the rest isn't getting any interest?

The standard minimum payment on Barclaycard cards is a percentage of the total balance. So when the total balance goes up, so does the minimum payment.

Some cards use different calculations, like all interest and charges plus something. Older Barclaycard cards might also use a different method. Your statement probably tells you the calculation method somewhere on it.

Paully232000

djdestiny wrote: »

It IS the case! Every month on my statement there are two separate lines, for example, these are my last three statements.
(I tried to link to scans of each part showing them but it won't let me post links as I'm a new user)

November
Standard purchase interest: £62.50
Standard cash interest: £33.27

October
Standard purchase interest: £62.49
Standard cash interest: £31.33

September
Standard purchase interest: £64.39
Standard cash interest: £31.46

I rang them to question this months ago, and was told that the interest would not stop being taken until I had cleared the normal balance, THEN the cash would be repaid and the interest stop. As I said before, it is daylight robbery, and I WILL close this account and never use Capital One again simply because of this reason.

You say it is unusual for the cash % being lower, I disagree.
They have done it for this exact reason! So that if you have a normal balance and take out cash, they know they can continue to rob you blind via interest on the cash until you clear the bigger balance.
It is a loophole they have created to make you may more interest because they know it will take longer to pay back the bigger balance, but in the eyes of the law they are doing no wrong because they are putting your payments towards the higher % interest rate!

Sorry I can only base my answer on the information you give, and as someone else has said you have more than just £40 classed as a cash advance to be accruing that much interest each month.

Also looking at credit cards in general, and the many i have had in the past the cash advance is usually a larger %

Paully232000

djdestiny wrote: »

I don't understand this. Why would my Barclaycard minimum payment go up if I did a 0% BT onto it?

For example, if I have a balance of £1000 on the card and I 0% BT £2000 onto it my balance is now £3000.
Surely I should only be paying the minimum payment on the £1000 as the rest isn't getting any interest?
Maybe I'm looking at it wrong...

Yes you are looking at it wrong, barclaycard min payment is 2.25% of the total balance on any given month, whether that be balance transfer, purchases etc etc

redpete

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!

No you are not. That would work out at something over 900% interest for your £40 cash withdrawal. No CC charges anything like this amount. As suggested by someone else, you have much more counted as cash withdrawals on the card, a touch over £1000.