Paying off Credit Card

Jagga

Hi,

I'm coming to an end of my interet free period for my Nationwide Credit Card. I have a balance of £4500.

Would I be better to pay this off with money that I have in my ISA or apply for a new 0% balance transfer card and leave the money in the ISA?

ISA is currently earning 1.75%

Consumerist

In purely money terms, a new balance transfer deal is likely to cost you a 3% fee so if the deal lasts longer than about 21 months then a balance transfer will work out cheaper.

YorkshireBoy

A more fundamental question would be why are you keeping £4.5K in an ISA making 1.75% when you could make 4% after BR tax (3% after HR tax) in current accounts?

Here's a calculator that will help you determine the profitability of any BT deal...

http://stoozing.com/calculator/stoozcalc.php

Jagga

YorkshireBoy wrote: »

A more fundamental question would be why are you keeping £4.5K in an ISA making 1.75% when you could make 4% after BR tax (3% after HR tax) in current accounts?

Here's a calculator that will help you determine the profitability of any BT deal...


Thanks for that. I've been using my credit card for purchasing and placed the money that I had left into the ISA for a temporary measure. Also my Nationwide current account's promotional period ran out so most of that also went into the ISA.

I've also filled up my LLoyds and three of my TSB accounts.

I've already filled my current accounts with LLoyds, and TSB.

Just been accepted for a Halifax 24 month 0% Credit card, so now am thinking about what to do with the money in the ISA, should I put it into another current account?

YorkshireBoy

Presumably there's a BT fee on that card? Why didn't you take their 20 month fee-free card? That would have delivered an immediate profit and made your decision a total no-brainer!

So the best you can get now is BoS at 3%, and maybe drip-feed regular savers with TSB and Lloyds from here. Should be able to generate an aggregate 4% plus gross.

But what does the calculator I linked to above say you should/could do?

Jagga

The fee for the balance Transfer is 0.8%.

I put in the figures in the calculator and this is still working out better even with the fee (nearly £40 more profit).

I've already got the Lloyds regular saver but and will open the TSB as well as this looks good and will give that a go.

Thanks for your tips.