Balance transfers

wannabedebtfree_2

Right lets see if I can explain this so other people understand what I am trying to say!!

With my 3 credit cadrs that have balances I don't get charged for transferring balances when it is not a 'special offer' now I am paying a PHENOMENAL amount of interest every month and although I am paying as much as I physically can the interest takes a huge chunk of it.

SO - my question is, if I was to roll the balances from one card to another, and keep doing this over and over, paying off a lump sum from 1 or 2 cards each month - for example -

Card 1 - £2800 (Limit £3k)
Card 2 - £1100 (Limit £2.5k)
Card 3 - £4050 (Limit £5.7k)

So could I do this:

Month 1
Transfer balance of Card 2 onto Card 3 - pay lump sum on Card 1 and Card 3
(and therefore missing the interest payment on Card 2)

Month 2
Transfer Card 1 onto Card 2 - pay lump sum on Card 3 (therefore missing interest on Card 1, and Card 2 not needing to be paid until following month)

etc etc etc

I am trying to avoid as much interest as possible, and although it sounds like a lot of messing about if it would work then it could save me a fortune.....BUT.........does this affect your credit history?? Do they keep an eye on the account if lots of toing and froing is happening??

Perhaps its a pie in the sky idea, but I just wondered if anyone had done something similiar?

PBA

I don't think this would work, as I doubt a credit card would give you the same interest free period on a BT as they would on a purchase, so you'd have to start paying interest from the day the BT took place.

Your most sensible way of reducing the interest is to get a new card at 0% to transfer the balances, or take out a personal loan to consolidate the debt.

CLAPTON

no it wont work I'm afraid.

The interest free period (typically 50 days) only applies if you pay off the full amount each month.. so you must have two consecutive months with a fully paid off card before the interest is cancelled.

so in your example you will pay interest up to the transfer date on credit card two (because the balance wasn't paid in full the previous month ) and then you will start paying interest on credit card 3 so no saving.

wannabedebtfree_2

Ok, thanks!

It was a good idea I thought .....LOL!

Milarky

(Are the rates on these three cards at all significantly different?)

Shift anything above minimum payments to repay the highest rated card first (if you're not already doing this.)

Also contact each of these credit cards and ask if they can reduce the interest rate in any way.

If you could get a life of balance (LOB) rate of any kind it will be a lot lower than now. Consider applying specifically for a new LOB card from another provider as the next stage.

On the basis of the newer rates (if any) on these cards use your credit limits to shift as much as possible in the direction of the lower rate(s)

What brands of cards do you have? This helps in suggesting what a particular issuer can or might do based on others' experiences (etc)