Is it always worth money transferring to save interest?

Farcasting

Hey everyone looking for some advice,
I have a £7250 o/s on a TSB Loan @ 23.9%.

I've been Pre approved
for a MBNA Credit Card £2800, 0% on money transfers for 12 Months 4% Fee
and a Tesco Credit Card with a limit of £5300 for 0% on money transfers for 40 Months. 3.94% Fee

If i was to pay £600 a month off my loan after 14 months id clear my loan but i'd have paid £930 in interest

If i money transfer to my Bank, since i can only transfer 95% of both i'd just be transferring enough to cover my Loan.

so lets just say 4% fee for £7250 would be £290 and i could pay my loan off at TSB.

is it worth doing this to save £640 or will the affect 2 new credit card applications have on my credit file not be worth it?

If i were to do the transfers i'd pay them both off within 12 months.

hope this makes sense

Cheers,
Farcasting

-taff

If you have the discipline to pay off the cards and are approved for them, and as long as you don't use them for anything else, and you've identified what your money goes on i.e. you have a tight hold on your budget, then it's a no brainer to save £640.

enthusiasticsaver

Yes I would do that to save £640. Don't worry about your credit file

MrsTinks

2 applications isn't the end of the world - so unless you need to apply for something else in the next 3-6 months it's a no brainer. If you need to apply for a mortgage in that time then maybe worth doing that first and THEN applying for the cards...

Helvetica_Van_Buren

Yes, it's worth it.

It's that laissez faire approach to money that gets people into debt in the first place.

Farcasting

thanks everyone, i'll go ahead and do so


Cheers

EssexHebridean

Good plan, BUT:
You MUST cut up the cards so you're not tempted to spend on them
You MUST set up DD's for at least the minimum payments to both cards - don't risk missing a payment or you will lose the 0% rate.
You should also double check that there is no repayment penalty for settling the loan early, if you haven't already done this
You need to put a budget in place so you avoid getting back into a similar situation in the future

Remember that right now, your credit file only matters if you have need of it, so as enthusiasticsaver says, don't worry about that side of things for the time being. (Unless, as MrsTinks says, you need to apply for a mortgage of something else necessary).

Watch out for the rate the MBNA card will transfer onto after 12 months too - they have a habit of being a bit "meaty" let's say. I assume your plan is to minimum-pay to the Tesco card and throw everything at the MBNA, in the first place though?

Farcasting

EssexHebridean wrote: »

Good plan, BUT:
You MUST cut up the cards so you're not tempted to spend on them
You MUST set up DD's for at least the minimum payments to both cards - don't risk missing a payment or you will lose the 0% rate.
You should also double check that there is no repayment penalty for settling the loan early, if you haven't already done this
You need to put a budget in place so you avoid getting back into a similar situation in the future

Remember that right now, your credit file only matters if you have need of it, so as enthusiasticsaver says, don't worry about that side of things for the time being. (Unless, as MrsTinks says, you need to apply for a mortgage of something else necessary).

Watch out for the rate the MBNA card will transfer onto after 12 months too - they have a habit of being a bit "meaty" let's say. I assume your plan is to minimum-pay to the Tesco card and throw everything at the MBNA, in the first place though?

Yeah I have a Barclaycard at 0% for 24 months aswell, so i'll just pay the MBNA within a few months then onto Barclaycard then onto Tesco.


I Have like £13000 total debt, but with overtime I take home about 2k a month, and my bills are negligible (under £100) so I'd be clearing most my debt by June 2017 anyway,obviously the longer interest free period acts as a safety net in case something comes up but yeah I've had my light bulb moment and want to be in a position where I can save as much as possible while still living at home, then start saving for a house