Most effective payment strategy?

ChristineSharp

I have £3k on a high interest card. I've been accepted for a new card with 18 months 0% for balance transfers. I don't know the credit limit yet but likely to be only 500 or 1000.

Should I pay as much as I can off my zero interest card and then balance transfer from my high interest card or should I pay as much as I can off my high interest card?

I'm trying to avoid interest but also transfer fees. I'll transfer as much as possible to the 0% card when I get it.

I'll have a few hundred pounds each month to pay off my cards. I don't know if I should pay min payment on high interest and do a balance transfer then pay hundreds off the 0% card to free up some space or another way entirely.

Any input appreciated.

[Deleted User]

BT as much as you can from the high interest debt. Then make minimum payments on the 0% card and as much as you can from the higher rate card.

grumbler

ChristineSharp wrote: »

I have £3k on a high interest card. I've been accepted for a new card with 18 months 0% for balance transfers. I don't know the credit limit yet but likely to be only 500 or 1000.

Should I pay as much as I can off my zero interest card

Do you mean after transferring the balance?

and then balance transfer from my high interest card or should I pay as much as I can off my high interest card?

It's obvious that you have to transfer as much as possible to 0%, then make minimum payments to 0% and pay as much as possible to the hight rate card.

I'm trying to avoid interest but also transfer fees. I'll transfer as much as possible to the 0% card when I get it.

I'll have a few hundred pounds each month to pay off my cards. I don't know if I should pay min payment on high interest and do a balance transfer then pay hundreds off the 0% card to free up some space or another way entirely.

What's the point in paying hundreds to 0% card and paying repeatedly balance transfer fees for new BTs?! Doesn't look like rocket science to me...

Anthorn

When I was in that position I picked on the lowest balance first and cleared that first. I understand the reasoning of avoiding interest by transferring to 0% cards. But as far as I'm concerned a balance makes interest and so I cleared the balance in order to avoid interest. That strategy of clearing balances provided me with a goal to work towards. Worked for me, might not work for you or anyone else.

ChristineSharp

What's the point in paying hundreds to 0% card and paying repeatedly balance transfer fees for new BTs?! Doesn't look like rocket science to me...

Forgive me for asking such a dumb question, hope I didn't spoil your day.

Thanks to everyone else. My new 0% card has a £1k limit, I'm going to transfer £1k of debt to it. I feel that if I was to pay as much as possible, on time every month that the credit limit might get raised, enabling me to transfer ALL of my high interest to the 0% card allowing me to relax and pay it off minimum payment if I want to.

The balance transfer fee is less than the interest fee so it seems to me it would cost more to leave it where it is and a strategy of getting a higher limit on a 0% card is what I'm after.

bengal-stripe

ChristineSharp wrote: »

My new 0% card has a £1k limit, I'm going to transfer £1k of debt to it. I feel that if I was to pay as much as possible, on time every month that the credit limit might get raised, enabling me to transfer ALL of my high interest to the 0% card allowing me to relax and pay it off minimum payment if I want to.

First of all, you can only transfer 90 or 95% of your limit, otherwise the transfer fee would take you over your limit.

Second, transfer options are usually time limited, maybe two months or so. You might get another offer at some later point, but there is no guarantee you will get one, just as there is guarantee your limit will be raised shortly.

So transfer as much as you can to the new card and pay the minimum. Throw all the money you have onto the old, high interest card and get the balance down, as far away from the limit as possible. A maxed-out card never looks good. In six months or so, when you have made significant inroads into your debt, try for another balance transfer card (from a new supplier).

Doctor_Duke

Good advice you can't guarantee a credit limit increase in the future really until at least six months. Paying the higher interest card balance is the best option. Sorry if you've had the odd abrupt response. Most people will genuinely help.