Planning BTs

pjapk

HI all,

I need to get on top of my CCs interest & get some BTs organised but need to make sure I do things correctly.

I currently have an MBNA card with an old balance of £4791 on it which used to have a limit of £7,500 but was recently raised to £12,500 automatically.

I'm currently paying 24.9% interest on it but every month I get a 0% BT offer for generally about 12/13 months, can't remember the fee but lets assume 3%.

I also have an HSBC card with £1,700 on it at 29.9% (which I obviously want to get shot of!) but, if it's still available to me, they also not long ago offered me a 1yr 0% type BT offer.

I then have a mint card with £5269 (£7550 limit) @ 20% but no recent offers.

Lastly I have a Santander card with £4253 (£6100 limit) @ 0% but which is due to expire imminently.

As an aside I also have an old Santander Zero CC which I use for odd bits at the end of the month but have paid full balance off each month for years. I keep this card useable as it still has the free currency exchange rates so primarily use it for purchasing items in $ etc. I regularly get 0% offers for this card but never take them up as I WANT to be able to spend (and repay in full) on this card.

So, I have the choice of juggling existing cards which have decent credit limits but only 0% for a year or so, or I start the process of applying for one of the newer longer 0% cards, but I have no idea what limit I'd get.

One thing that worries me a little is that, although I should have a fantastic credit rating (mortgage for 16 yrs, £5k + £3k 0% loans completed in the last 3 years, 2yrs into loan on a caravan, 2yrs into 3yr loan on car - all of them with zero payment hiccups) I wonder if another CC company is going to look at all my AVAILABLE credit & think I'm too risky to give another card?

So, if I stick with the cards I have (which I could obviously consolidate to fewer cards), if I first transfer HSBC £1700 to MBNA, then perhaps MBNA to HSBC (assuming offer still available) that will just leave me with the 0% £1700 on the MBNA, which I can then transfer the MINT & Santander cards to, also at 0% if done soon enough?

Is my logic correct? MBNA can't get upset with me transferring in, then out, then 2 in again can they?

At the end of all this I should get rid of about £213/month interest payments & get some sensible payments to get the debt down quicker than minimum payment levels...

Any advice/tips gratefully appreciated!

Summary of cards below but think formatting might get stuffed:

Card Balance Limit Avail Rate £ / Month Monthly Int.
MNBA £4,791.37 £12,500.00 £7,708.63 24.90% £139.62 £88.30
Mint £5,269.01 £7,550.00 £2,280.99 20.00% £122.00 £88.67
HSBC £1,698.02 £7,500.00 £5,801.98 29.90% £42.59 £36.89
Sant. £4,253.00 £6,100.00 £1,847.00 0% £44.00 £0.00
Zero £250.00 £6,300.00 £6,050.00 0%

[Deleted User]

Yes, you could do that.

Ignore any credit rating you think you may have. You don't state your income, but lenders are likely to see you as high risk due to all your debts.

Having said that, you could try for a new BT card to save on fees, but then leave it at that.

You do need to address the cause of the debt though.

pjapk

Thanks. This is "older" debt that I guess I've been putting off sorting to a large extent. Nothing has been added to it for a couple of years at least, it's just I got lazy about watching for the end of my 0% periods & it's time I got it sorted again.

Income has drastically improved in the last few years & currently stands at around £65k.

I've been procrastinating over sorting the CC's or paying off a chunk of the mortgage (4.5yrs left on it) but as Martin always says, whilst I'm not on 0% I need to concentrate on the debts with the highest interest rate...

redpete

Your plan should work but I think you are unlikely to get extra credit.

Strikes me as odd that you are keeping a cc to save a few % on occasional $ transactions when you are spending over £200 a month on cc interest plus whatever the other loans are costing you.

You seriously need to sort out reducing that debt, getting more on 0% will help but ì suspect the root cause needs attention.

pjapk

You're quite right to be fair though I'm not in any financial difficulty (any more, I certainly was some years ago hence the CC's).

I earn a good wage now as a contractor via my own Ltd company. The company has a good buffer/war-chest in it which I could theoretically use part of to pay the CC's off in full but I really struggle to get myself over the hang-up of paying so much tax by pulling out that cash, plus I feel far more comfortable having it there for if/when work dries up although I've been steady for a long while now with no days lost at all.

Having had so many years being so skint (to the point where I had bailiffs around for Council Tax 10yrs or so ago) I've enjoyed having the flexibility to buy the things I like (such as photography equipment which I'm actually in the process of turning into another business).

One of my personal issues is limiting my spending when money's "available". For example, (whilst the CC's were all still on 0%) a couple of years ago I reasoned to myself that money in the company account was wasted with 0% interest when I could have had it sitting in my 1-2-3 account earning up to 3% so I trialled paying myself 3 months in a lump sum on the premise that it'd be earning some interest at least.

In the end I went through it quicker than I should have (not worryingly so, just enough for me to know that it wasn't worth my trying it again) so have just stuck with paying myself monthly since though it does irk me thinking about it sitting there doing nothing.

Yes, I've read (multiple times) Martins advice that "savings" make no sense if you have debt and that the CC can be used in emergency as well etc. but I worry that I wouldn't be able to get that (emergency) spending at 0%...

Anyway, you have spurred me on somewhat so I bit the bullet today & withdrew/paid of £6.5k of the CC's (both the MBNA and the HSBC cards have now been cleared) with a view to transferring the remainder to MBNA at 0% for the next year or so. If things are still going well work-wise, then I'll also pay that off in full when 0% ends. If I've struggled work-wise for any reason then I'll just do another 0% transfer anyway.

I have a genuine reason to want some safety-net in that I've recently been having health issues that could potentially lead to me being unable to work for periods of time so would really worry if I didn't have that buffer of cash available to me.

Anyway, sorry for the ramble, but I appreciate the mild kick up the rear and feel happier for taking a more pro-active step forwards with my debt!