What debts to overpay on first?

Sharon87

So I have over the years built up a fair bit of credit card debt. I have always managed it so I don't default and therefore still have a decent credit rating. I have 6 credit cards at the moment with most of them on a 0% or low interest rate deal. I just want some advice on which ones to pay off first with the extra income I am now getting.

I did one stupid thing with my Barclaycard - I had a good 0% deal going on it - which expires in January 2016, but then during that period they offered me a low balance transfer deal, which I took, forgetting that my minimum payment would pay off the portion accruing interest and not the soon to be costly sum!

Here are my debts with interest rates below:

Halifax - £3186.98 -
- £2163 - 0% until 23rd March 2016
- £988.80 - 0% until 4th May 2016
15.9% standard rate
Minimum payment - £31.98

Natwest - £296.46
Low balance deal 5.9% or 6.9%
Minimum Payment - I think about £8

MBNA - £3058.01
3 different 0% deals - need to find expiry dates, but £1800 of it was recently so maybe about 10 months left.
17.9% for balance transfer - £1811.25
20.9% for money transfers - £570.76 and £676
minimum payment: £30.58

Barclaycard
£2968.41
- £2281.33 0% till January 2016 - then 18.9% (I think after)
- £687.08 - 6.9% low balance deal
Minimum Payment - about £63

Fluid - regular interest 17.9%
£1883
0% for about another 10-15 months - it doesn't say on my statement.

Tesco - I pay off in full every month - used as an every day spend card.

Now Halifax and Natwest keep offering me 0% or low balance transfer details so can use these to transfer if need be. Halifax are currently offering me only 9 months 0% - with about 1k left on my balance to transfer and Natwest are offering me low balance transfer deal - credit limit of £1700.

Now I've tried the snowballing calculator, but it doesn't take into account my stupid Barclaycard mistake and multiple 0% deals!

I just need a second opinion on what's best to pay off first. At the moment I'm spreading the extra money around to different cards, but I think it may be best to concentrate efforts on one card. Do you think I should move my Barclaycard 6.9% balance onto my Natwest 6.9% to pay off the soon to be ending 0% or wait until my 0% expires and then transfer it (assuming they'll offer me it again).

I sometimes also get 0% deals for my Tesco card, so this is a possible option for balance transfer deals. I currently pay about £215 on my direct debits to my credit cards - I pay more than minimum on some cards. But do transfer more money to cards on pay day or the end of the month if I have money spare.

Sorry for the mega post, but any advice?

DandelionPatrol

Sharon87 wrote: »

Now I've tried the snowballing calculator, but it doesn't take into account my stupid Barclaycard mistake and multiple 0% deals!

It can take them into account relatively easily if you change your mindset.

If you take your MNBA card as an example, you should divide it into 3 individual loans

Sharon87

I tried that but then what to put in minimum payment? MBNA is a fixed amount at a minimum of £25. I've tried splitting each balance transfer and it hasn't worked as then the minimum payments are too low or too high, so doesn't give an accurate amount what I need to pay, therefore useless at working out which is best to pay off first!

DandelionPatrol

Sharon87 wrote: »

I tried that but then what to put in minimum payment? MBNA is a fixed amount at a minimum of £25. I've tried splitting each balance transfer and it hasn't worked as then the minimum payments are too low or too high, so doesn't give an accurate amount what I need to pay, therefore useless at working out which is best to pay off first!

Put the whole minimum payment on the component which is paid first each month under the rules of the card. OK, when you have paid that component off, you will need to adjust the snowball.

Yes, this is not perfect, but then in the event, no one will manage to pay exactly to the snowball. It will give you quite a good idea of how things will pan out.

Sharon87

Anyone else on suggestions? The snowball calculator gives numbers, but doesn't account for everything, like when to transfer - especially with the Barclaycard. Do I wait until the 0% is expired before I transfer? Shall I pay off my Natwest as it's such a low balance? Shall I stop using my Tesco card for general purchases and ask if there are any 0% deals?

Or shall I apply for another card - but I have been declined for 2 cards recently - HSBC because I couldn't prove my future income as I work contracts and Virgin for unknown reasons, these applications were a couple months ago. I have actually decreased my Tesco credit card limit to help with applying for new credit as too much credit available may have been an issue.

catriona79

Sharon87 wrote: »

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Halifax - £3186.98 -
- £2163 - 0% until 23rd March 2016
- £988.80 - 0% until 4th May 2016
15.9% standard rate
Minimum payment - £31.98

Natwest - £296.46
Low balance deal 5.9% or 6.9%
Minimum Payment - I think about £8

MBNA - £3058.01
3 different 0% deals - need to find expiry dates, but £1800 of it was recently so maybe about 10 months left.
17.9% for balance transfer - £1811.25
20.9% for money transfers - £570.76 and £676
minimum payment: £30.58

Barclaycard
£2968.41
- £2281.33 0% till January 2016 - then 18.9% (I think after)
- £687.08 - 6.9% low balance deal
Minimum Payment - about £63

Fluid - regular interest 17.9%
£1883
0% for about another 10-15 months - it doesn't say on my statement.

Tesco - I pay off in full every month - used as an every day spend card.

Now Halifax and Natwest keep offering me 0% or low balance transfer details so can use these to transfer if need be. Halifax are currently offering me only 9 months 0% - with about 1k left on my balance to transfer and Natwest are offering me low balance transfer deal - credit limit of £1700.

Now I've tried the snowballing calculator, but it doesn't take into account my stupid Barclaycard mistake and multiple 0% deals!

I just need a second opinion on what's best to pay off first. At the moment I'm spreading the extra money around to different cards, but I think it may be best to concentrate efforts on one card. Do you think I should move my Barclaycard 6.9% balance onto my Natwest 6.9% to pay off the soon to be ending 0% or wait until my 0% expires and then transfer it (assuming they'll offer me it again).

I sometimes also get 0% deals for my Tesco card, so this is a possible option for balance transfer deals. I currently pay about £215 on my direct debits to my credit cards - I pay more than minimum on some cards. But do transfer more money to cards on pay day or the end of the month if I have money spare.

Sorry for the mega post, but any advice?

Ok, so quite a complicated situation, but nothing that can't be done.

First though, you need to try and sit down and work out all the interest rates and when they end for each deal on each card. Then post it here, SOA style, clearly setting it out so that it's easier to compare, treating each element of each card as a separate debt. What I would like to see is when each deal expires and how much there is on the card.

Also - give us an idea how much you have been overpaying by each month, in the last 6 months?

Also, what is your goal: are you trying to pay these debts down or are you happy rotating them for the time being?

I think you are right thinking about it in two ways:
1. Which is the most expensive debt and repaying that first, plus
2. What about the future - you need to set the rotation up so that you still have some 0% deals left to you.

So,
1. Find the debt on which you're paying the highest interest and pay all extra on that
2. Think of what deals you have had already and if there's a card that you have not had yet.

You have probably heard that Virgin offers BTs for 40 months, BCard for 32 and more, so effectively if you get one of those deals, the cost of this credit (the transfer fee) is less, when spread across 40 months, than if it was spread across 9 months only.

So, every time you move money, and pay a fee, you pay a sort of "interest" effectively. Therefore, the fewer times you move the money, the better. Cost wise, and for your credit rating.

So, it makes sense to work towards having unused options in the card world. Can you do that?

Sharon87

I've been overpaying by at least between 50 and 100 pound a month on the last 6 months - so that's as well as the minimum payments. At the moment I overpay on Halifax, Barclaycard and Natwest card as they're the only cards that allow me to set my own amount by direct debit. I sort of make my own minimum I want to pay! Then I transfer more money when I have it. Any cashback I get I put that on my credit cards, my Halifax £5 reward goes straight on my Halifax card.

I will phone MBNA to get my 0% expiry dates as they don't include it on the statement like most of my others.

I am currently paying interest on the Barclaycard low interest balance transfer and Natwest. The worst interest rate after the 0% expires are the money transfers on my MBNA, which is 20.9%. My regular interest rates for balance transfers are between 15.9% and 18.9%, so not that much difference.

I have tried applying for the Virgin card, but might try again early next year, maybe once I've been in a job more than 1 month. I already have the Barclaycard, so can't get another one! I know Lloyds and Post Office do a long balance transfer deal, so those are 2 other options. I think I'm more likely to get the Post Office card.

Halifax, Natwest and Barclaycard regularly offer me regular transfer deals, Halifax are usually the best.

So looks like overpay between my Natwest and Barclaycard. If I pay off my Natwest it leaves more balance for future balance transfers. And probably in the future balance transfer the future 20.9% balances to my Halifax at 0% or my Natwest at 6.9%, unless I get accepted for another card.

pennies_from_Heaven

On your mbna card you need to download the statement to your pc, then page down to the second page - the interest rates and when it runs out are on there - they don't put it on the transactions screen or quick view statements for some reason.

Sharon87

pennies_from_Heaven wrote: »

On your mbna card you need to download the statement to your pc, then page down to the second page - the interest rates and when it runs out are on there - they don't put it on the transactions screen or quick view statements for some reason.

Thanks for that!

MBNA expiry dates:
£570.76 expires on 2nd November 2015 - 17.9% after
£1811.25 balance transfer till 1st June 2016 - 17.9% after
£676 money transfer till 1st June 2016 - 20.9% after

Fluid expiry date:
£883 10th June 2017 - 17.9% after


I have just actually got some cashback confirmed from Quidco, so that is going straight onto a credit card. I should have another £400 or so cashback to come in the next few months, so I'm going to use this to pay off my cards.

My aim is to pay off my credit cards asap so I don't have to house share anymore! I need to move house in October and if I didn't have credit cards to worry about I would have a bigger budget for rent! I do want to find a slightly better place than I'm in at the moment but I'm torn between quality of life and rent prices! I am sick of house sharing with 3 others so I'm looking at a smaller house/flat share but don't want to increase what I'm paying in rent by too much! Oh the dilemmas!

I would love to buy eventually, but that will take years and years and probably further out of London than I live now!