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

Willowpop

SeduLOUs wrote: »

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.

This is assuming he can get the offers for new customers. Debt is quite high compared to income so would be seen as a risk.
This is why I'm trying to work out if it's better to take the 4.9% life of balance or keep hopping between shortish 0%offers.

HappyMJ

Willowpop wrote: »

This is assuming he can get the offers for new customers. Debt is quite high compared to income so would be seen as a risk.
This is why I'm trying to work out if it's better to take the 4.9% life of balance or keep hopping between shortish 0%offers.

Hopping is better but with new cards. You need to close the old ones. Yes you can get existing customer offers but new customer offers are always better.

SeduLOUs

Willowpop wrote: »

This is assuming he can get the offers for new customers. Debt is quite high compared to income so would be seen as a risk.
This is why I'm trying to work out if it's better to take the 4.9% life of balance or keep hopping between shortish 0%offers.

It's also costly to assume you can't get new offers without actually applying. If, and only if there are no other alternatives, then I'd agree the life of balance is the way to go, but there are certainly cheaper options and they will be easier to come by if you don't hang onto unneeded cards.

I wouldn't qualify 3 year deals as hopping between short offers to be honest.

Willowpop

OK, I'm still doing the maths....
One quick question... 4.9% pa... so will we pay that interest on the whole amount we transfer until it's paid off, or is the interest calculated on the outstanding balance on the card? IE will the interest come down the more that is paid off?

redux

The interest reduces with the balance.

Find an online loan calculator and play with some figures. I like the Guardian one (no political affiliation implied, it's just a useful tool).

Put in 4.9% per annum interest, then adjust the number of months a few times to compare monthly amounts required, and that Guardian calculator also shows columns of interest and principal being repaid each month

You might add the interest column up for 17 months to compare that to the fee on that 0% offer.

I think I agree with some of the thinking here, hedge things by putting some on the lifetime rate, and look for better 0% offers elsewhere.

Willowpop

redux wrote: »

The interest reduces with the balance.

Find an online loan calculator and play with some figures. I like the Guardian one (no political affiliation implied, it's just a useful tool).

Put in 4.9% per annum interest, then adjust the number of months a few times to compare monthly amounts required, and that Guardian calculator also shows columns of interest and principal being repaid each month

You might add the interest column up for 17 months to compare that to the fee on that 0% offer.

I think I agree with some of the thinking here, hedge things by putting some on the lifetime rate, and look for better 0% offers elsewhere.

Redux, that was a SUPER helpful calculator..THANKYOU!!
So I can now see that if I park the 6k onto the 4.9% life of balance card and only ever pay off the same as I'm paying now, it'll take 5 years and 'only' accrue a total of £777 interest. That's not bad really.
I'd hope to be able to throw more money at it once a loan has been paid off in a couple of years, so this would reduce with the extra payments. I think this may be the way forward for now, and I'll try to apply for a 0% card this evening too as a new customer.. eligibility calculator says I have 90% chance, but what the credit limit would be remains to be seen.

Sharon87

Being in a totally situation to you I have had to stick to my existing cards as I've applied for 2 credit cards in the last 5 months and got declined for both of them. One said it's because of my current debt level, the other just said check your credit report! I also got turned down for a current account, but that was just me chancing my luck at the free money as I'd JUST moved house and wasn't on the electoral yet.

Good luck with applying for a new 0% card, I now have a credit card I want to ditch and after paying some of my debt down, it may help me get a long 0% deal too. I am currently in a 0% for 30 months, it is just about halfway and I can't believe I don't have to worry about it except paying the minimum!