Getting out of debt - advice on 'Plan' & 0% balance transfers

Olive_8

Hello, seeking advice on the below situation, I am very new to all this!

I was hoping to move £8,500 debt (5,500 on the CC & 3,000 overdraft, TSB) onto a 0% BT card, and was on Monday, accepted for a virgin money (32 months @ 0.59% fee) card, however only for a balance of £2,200 (still something!). I am wondering if I should try to open another 0% balance transfer card to cover the remaining credit card balance & my overdraft. I was thinking of going for one with a longer 0% time & a higher initial fee so that I can get a bigger credit limit - does this make sense? And can I apply for more than one credit card in the same week!?!?

I then plan to use my TSB a/c as my business account and set up a basic or current a/c with virgin money as my personal account (I have recently registered as self employed). I am determined to get my debt problem sorted !! But I feel a bit lost as how to proceed given I didn't get the full amount! Any help & advice would be so appreciated )

Olive

Sanctioned_Parts_List

As you've just taken on a new card, you'll struggle to get another so soon, unless your credit rating is truly excellent. Each credit application is recorded as a hard search on your credit file, so is visible to other lenders. As lenders don't immediately know whether you've actually accepted/been accepted for credit, they assume that you've been awarded the new card, and gauge affordability accordingly. In general it's best to wait 3 months between credit applications.

There is another way, though, using just the lenders you have already: I had a similar issue a couple of years ago - balance transfer of about £9000, however the new lender only offered me £4000 out of the box.

I phoned the new credit card company and explained what I was doing. They raised the limit to £5000 after review, but were also very kind in explaining exactly what criteria prevented them from offering me the full BT amount, which in my case was total credit - i.e. the value of my old credit limit plus the new credit limit would exceed their affordability criteria.

Then I called my first CC company and had them drop the limit right down onto the balance owed. Their online banking system updated within the hour and I was able to take a screenshot of the new limit etc.

Third step, I called the second CC company again and explained that I'd now dropped the old card's credit limit right down, and could they review my limit again - I can email evidence if they wish (they didn't need it). They were then prepared to take a couple more thousand.

I had to repeat this once more until the full balance was transferred, but got there in the end. Note that as it's expressed as a percentage, the fee is the same whether it's transferred in one lump or several.

[Deleted User]

What's the APR on your original CC, ie. the one that had/has £5,500 on it?

Also, how are your finances in general?

Do you currently pay more than the minimum on the CC, and do you have anything left, at the end of the month?

Olive_8

Thank you Sanctioned, this is so very helpful

HOWEVER! I already called VM, i called twice and both times I spoke to kids who really didn't seem to know what on earth they were talking about! ;o/ I was told in the end that I wouldn't be able to apply for a review until after 6 months of using the card, or I could write a letter of appeal, but only a letter, which doesn't fill me with confidence...

So I suppose I could write the letter of appeal but it all sounds like its going to take quite a long time and I really want to clear my TSB o/d & cc balance so that I can follow through with my plan! Feel stuck. Any helpful thoughts?

Also, i'm not sure I quite understand "the value of my old credit limit plus the new credit limit would exceed their affordability criteria." - what's affordability criteria?

Thank you thank you !

[Deleted User]

There's no way you can clear them, with the current limit on the 0% card.

One thought does occur.

Is the card 0% only on BTs, or on purchases too?

Olive_8

Hi Bob, thanks in advance for any advice

Okay, so i've just found out (to my surprise & horror!) that my overdraft interest is higher than my credit card !

My CC is 19.69% (1.51 pm) APR

My O/D is 19.94% (1.53 pm) AER

HOWEVER, my monthly interest charge for the O/D is around £40 and for the CC it's £80 as the balance is higher. So now I don't know which to pay off first?? I have just received the £2020 from VM and was thinking to put £2000 into my credit card to get the debt balances more even, then perhaps concentrate on clearing my O/D first (to my utter surprise!) as is the higher one and also comes with a £6 monthly fee. Does this make sense?? ;o/

Also, still stuck with the not getting a high enough limit from VM and debating applying for another 0% balance transfer today or tomorrow...

Thanks again!

Olive_8

"Is the card 0% only on BTs, or on purchases too?'

I just checked, it's 3 months at 0% on purchases, not sure I even understand what this means !?... What's your thought??.....

Olive_8

Sanctioned_Parts_List wrote: »

As you've just taken on a new card, you'll struggle to get another so soon, unless your credit rating is truly excellent. Each credit application is recorded as a hard search on your credit file, so is visible to other lenders. As lenders don't immediately know whether you've actually accepted/been accepted for credit, they assume that you've been awarded the new card, and gauge affordability accordingly. In general it's best to wait 3 months between credit applications.

There is another way, though, using just the lenders you have already: I had a similar issue a couple of years ago - balance transfer of about £9000, however the new lender only offered me £4000 out of the box.

I phoned the new credit card company and explained what I was doing. They raised the limit to £5000 after review, but were also very kind in explaining exactly what criteria prevented them from offering me the full BT amount, which in my case was total credit - i.e. the value of my old credit limit plus the new credit limit would exceed their affordability criteria.

Then I called my first CC company and had them drop the limit right down onto the balance owed. Their online banking system updated within the hour and I was able to take a screenshot of the new limit etc.

Third step, I called the second CC company again and explained that I'd now dropped the old card's credit limit right down, and could they review my limit again - I can email evidence if they wish (they didn't need it). They were then prepared to take a couple more thousand.

I had to repeat this once more until the full balance was transferred, but got there in the end. Note that as it's expressed as a percentage, the fee is the same whether it's transferred in one lump or several.

Thank you Sanctioned, this is so very helpful

HOWEVER! I already called VM, i called twice and both times I spoke to kids who really didn't seem to know what on earth they were talking about! ;o/ I was told in the end that I wouldn't be able to apply for a review until after 6 months of using the card, or I could write a letter of appeal, but only a letter, which doesn't fill me with confidence...

So I suppose I could write the letter of appeal but it all sounds like its going to take quite a long time and I really want to clear my TSB o/d & cc balance so that I can follow through with my plan! Feel stuck. Any helpful thoughts?

Also, i'm not sure I quite understand "the value of my old credit limit plus the new credit limit would exceed their affordability criteria." - what's affordability criteria?

Thank you thank you !

Olive_8

Bedsit_Bob wrote: »

There's no way you can clear them, with the current limit on the 0% card.

One thought does occur.

Is the card 0% only on BTs, or on purchases too?

Hi Bob, thanks in advance for any advice

Okay, so i've just found out (to my surprise & horror!) that my overdraft interest is higher than my credit card !

My CC is 19.69% (1.51 pm) APR

My O/D is 19.94% (1.53 pm) AER

HOWEVER, my monthly interest charge for the O/D is around £40 and for the CC it's £80 as the balance is higher. So now I don't know which to pay off first?? I have just received the £2020 from VM and was thinking to put £2000 into my credit card to get the debt balances more even, then perhaps concentrate on clearing my O/D first (to my utter surprise!) as is the higher one and also comes with a £6 monthly fee. Does this make sense?? ;o/

Also, still stuck with the not getting a high enough limit from VM and debating applying for another 0% balance transfer today or tomorrow...

Thanks again!

Olive_8

Bedsit_Bob wrote: »

There's no way you can clear them, with the current limit on the 0% card.

One thought does occur.

Is the card 0% only on BTs, or on purchases too?

"Is the card 0% only on BTs, or on purchases too?'

I just checked, it's 3 months at 0% on purchases, not sure I even understand what this means !?... What's your thought??.....

Olive_8

Bedsit_Bob wrote: »

What's the APR on your original CC, ie. the one that had/has £5,500 on it?

Also, how are your finances in general?

Do you currently pay more than the minimum on the CC, and do you have anything left, at the end of the month?

Finances in general, well errrm i'm in £8,500 debt across the O/D & CC so not great ! ;o/ But I am on a mission to get them in order !! I pay more than the minimum each month but still close to the minimum as can't afford any more and by the end of the month i'm right at the end of both balances ;o/

But this is why I want to shift the debt to a 0% BT and then use the TSB for my 'business' bank account (I am self-employed) and set up another current or basic account to pay myself a wage and can therefore live within a budget and not be living in my overdraft each month ! Hope that all makes sense. But my plan was scuppered when I didn't get enough from Virgin Money to clear the TSB balances....