life of balance offer or 0%. Maths help please.

Willowpop

Hi all,
Can anyone help me with some maths please.

I have a couple of credit cards that I am being charged interest on.
A third card is offering 2 deals:
Either 0% until April 2017 for a 4.5% fee
Or 4.9% for life of balance with no handling fee.

I have £6000 to move and will be paying just over the minimum repayments. I will not have cleared the debt before the 0%offer finishes in April 2017 and would then look to move what is left to another 0% offer which would obvs have fees.

I'm struggling to work out if I am better to take the 0% and keep bouncing the money around every year or so, or take the life of balance offer.
Is anyone any good at maths?
Thanks in advance

HappyMJ

I'd find another card with 0% on balance transfers with a lower fee and transfer the balance on to that card. 4.5% is a high fee.

Willowpop

HappyMJ wrote: »

I'd find another card with 0% on balance transfers with a lower fee and transfer the balance on to that card. 4.5% is a high fee.

It is a high fee, but I don't want to take on any more credit right now, and use the cards I already have and their existing credit.

Willowpop

That said, the eligibility checker is showing a 90% chance of getting an HSBC card with a lower fee and a 32 month 0%.
I just don't know how to work out what what. 4.9% interest for the life of the balance would work out at... is it 4.9% of the outstanding balance per year? Interest confuses me.

Sharon87

I was in a similar position, I had a 4% fee on money transfers or 4.9% life of balance. I wasn't going to clear the balance after the 0% period on offer either.

I went for the life of balance, it's a no brainer really. The fee is about the interest you'd pay in a year and a bit - so basically almost the time your 0% is for. And if you don't get any other 0% offers you'd be screwed on a high rate.

So transfer it onto the 4.9% and if any offers do come up on your other credit card(s) then you can transfer a certain amount from the 4.9% card to the new 0% deal - an amount you know you can pay off.

I transferred my Barclaycard to my MBNA life of balance less than a month ago and Barclaycard are already offering me 0% deals!

Willowpop

We'd be clearing a barclaycard onto an mbna as well!
I'm thinking that the 4.9% life of balance is probably the best..and like you say, if then a zero % pops up I can move money onto that in chunks so I can pay it off, but the life of balance low rate keeps the interest low for the whole term if we don't get a zero offer at some point.
I *think* I'll be doing that tomorrow and going for the life of balance.. It seems logical to me, but I've always gone for the 0% offers in the past, but bouncing them around all the time obviously costs money.

Tyrone_Black

Willowpop wrote: »

We'd be clearing a barclaycard onto an mbna as well!
I'm thinking that the 4.9% life of balance is probably the best..and like you say, if then a zero % pops up I can move money onto that in chunks so I can pay it off, but the life of balance low rate keeps the interest low for the whole term if we don't get a zero offer at some point.
I *think* I'll be doing that tomorrow and going for the life of balance.. It seems logical to me, but I've always gone for the 0% offers in the past, but bouncing them around all the time obviously costs money.

What you're proposing sounds sensible, and I've used a 0% interest with 0% fee card recently. It was Santander and came with an annual £24 fee but I got Quidco cashback of £12, I think. I've done eligibility checkers for others and they've suggested I could get some time at 0% with no fee.

vlad

Willowpop wrote: »

It is a high fee, but I don't want to take on any more credit right now, and use the cards I already have and their existing credit.

Once you transfer the debt then close the old cards down, and try as best you can to pay as much as you can each month.

Sharon87

vlad wrote: »

Once you transfer the debt then close the old cards down, and try as best you can to pay as much as you can each month.

If you have self control you don't need to close the cards down as they may offer 0% deals like mine did. And if your credit rating's not that good you may not get another 0% deal.

However if you have loads of available credit and a good rating, closing a card down may help you get a new card with an even better 0% deal in the future. It's all about risk.

Willowpop

Sharon87 wrote: »

If you have self control you don't need to close the cards down as they may offer 0% deals like mine did. And if your credit rating's not that good you may not get another 0% deal.

However if you have loads of available credit and a good rating, closing a card down may help you get a new card with an even better 0% deal in the future. It's all about risk.

Self control isn't a problem, and I think I'd prefer to keep the cards open and look for deals like we are currently being offered to move the money to...I know we probably won't get as good a deal as a new customer, but at least I know we have enough credit available to us to juggle the debt. I'm about 6 months away from clearing my debt doing it this way and it's worked...This money is my husbands debt that I'm sorting out for him now so will do the same thing.
I think I'll have him apply for a new card and see if he can get a decent 0% offer for at least some of the deal and then park the rest of the 6k onto the 4.9% for the life of the balance and chip into it that way.

SeduLOUs

Existing cards often send me 0% offers, but the fees and durations are usually absolute rubbish compared to what is on the market.

If I were you, I'd be looking for a better offer - 4.9% until April 17 isn't great (and neither is 4.9% for life of balance) when you can currently get 3 years at 0% for under 2.5% fee from several providers.