Santander 0% Transfer - been accepted

MrsShazbat

Against all my expectations, I applied for a Santander CC on the back of an email they sent me (as an existing customer) and was accepted more or less by return :eek:

I intend to use it to do a BT from my Cap1 card which has 34.9% interest. However, there was nothing in the application about how much I intended to transfer and consequently the limit they've given me is £2500 while ideally I wanted to transfer £3500 to clear the Cap1 card (the figure I used on the calculator tool before applying).

I'm grateful to get accepted (have shied away from applying up to now because of previous IVA/DMP but that's about 3 years behind me now) so presume this isn't unusual and just to get on with paying it.

Do I transfer it now or is it like buying something and is there a way to know when best to do it so that I get the maximum credit before having to make a payment? I've never managed to work it out on my current card and I've never done this before.

Thanks.

[Deleted User]

The sooner you transfer it, the sooner you stop paying 34.9% interest.

MrsShazbat

Well yes, that's true enough. It's all set up although I haven't received the card yet, so I can sort it out tonight.

Ebe_Scrooge

Transfer as much as possible to the Santander card ( it's usually 90% of your credit limit ) straight away. Set up a DD to make the minimum payment to Santander each month. It's really important to do this, because if you miss a payment they'll instantly remove the promotional 0% rate and put you on to their standard rate.


In addition, for the first month watch it closely to make sure the DD goes through, and be ready to make a manual payment if there are any issues.


Second point - don't spend anything on the Santander card, just let it tick over each month, paying the minimum.


Meanwhile, pay as much as you possibly can to the Cap1 card each month, with the aim of clearing it ASAP. The sooner you clear it, the sooner you stop paying interest, and what you've saved in interest can then be put aside ready to pay off Santander when the 0% deal expires.


Lastly, make a note in your diary of when the 0% deal expires. You need to have paid it off by then, or else have plans in place to transfer the remainder to another 0% card - bearing in mind there's no guarantee that you'll be accepted for another one. Although a year or whatever of having demonstrated good financial management can only be a good point on your credit history.

molerat

Ebe_Scrooge wrote: »

Second point - don't spend anything on the Santander card, just let it tick over each month, paying the minimum.

Why not ? A bit of a sweeping statement without giving a reason.

MrsShazbat

I'm keeping it for the BT and the 0% to pay off the two catalogue companies to reduce my interest, but need the full card numbers for those. Chunk of CC balance transferred (doesn't cover it all) so I'm on my way.

saver861

molerat wrote: »

Why not ? A bit of a sweeping statement without giving a reason.

The reason would be that they would be paying interest on the purchase amounts unless they clear the card balance.

If you take out a bt at 0% for 20 months for example, it will stay interest free for that period. Any purchases on the other hand will accumulate interest to be paid. So its always a golden rule not to purchase anything on a 0% bt card.

Majali

What about if it is 0% on BT AND purchases? In the case of Santander 123 credit card.

Do I accumulate interest if I BT and also use the card for purchases at the same time?

saver861

Majali wrote: »

What about if it is 0% on BT AND purchases? In the case of Santander 123 credit card.

Do I accumulate interest if I BT and also use the card for purchases at the same time?

If it is 0% for purchases and BT's for the full duration then no you wont pay interest on either before the end of the deal.

However, usually they are a bit more sneaky than that. If you have a 0% BT for say, 24 months it does not mean the purchases are 0% for the same period. Usually purchases are only 0% for maybe for the first three months. Problem is then you end up paying interest on any purchases as your monthly payments will be reducing your BT amount while the purchases will be adding interest.

So you need to be clear which is which and when do each offer finish. Usually I max out a card with a BT and then set up a direct debit to pay it monthly until the end of the deal. About a month or so before the end, I get another card and BT to that for another period at 0%.

Purchases I treat separately and get a 0% purchase card for 18 months or whatever it is, then BT that to a 0%.

However, crucial thing to remember is that the purchases are those I would be making anyway and the money will be still in an interest paying account until the time comes to pay off the card - its not a case of buying stuff just cos I have a 0% purchase card.

molerat

saver861 wrote: »

The reason would be that they would be paying interest on the purchase amounts unless they clear the card balance.

If you take out a bt at 0% for 20 months for example, it will stay interest free for that period. Any purchases on the other hand will accumulate interest to be paid. So its always a golden rule not to purchase anything on a 0% bt card.

Except that does not apply to the Santander card as it is 0% for both BTs and purchases hence the "sweeping statement" comment. Any reduction in the balance could be put back on with purchases and that money used to reduce the balance on the interest paying card.

saver861

molerat wrote: »

Except that does not apply to the Santander card as it is 0% for both BTs and purchases hence the "sweeping statement" comment. Any reduction in the balance could be put back on with purchases and that money used to reduce the balance on the interest paying card.

Yes - if it's the case with a card that the 0% is the same duration for purchases and BT's then it makes no difference in terms of interest.

Usually though if you have a 0%BT card, even if it is 0% for purchases also, then you would max out the 0% BT as early as possible with a BT from an interest paying card. There would be no benefit to leaving credit available for general purchases, other than if you have a big ticket purchase imminent.

Obviously exceptions could occur, such as going past the usual three months deadline for the 0% but that should not happen if you are on top of things.