Reducing credit card debt/applying for balance transfer

gen789

I've been on the phone to banks and credit card companies all day as I'm looking at applying for a new credit card in the near future and transferring some of my existing balance over.

I've been struggling with low credit score for over a year, but thankfully it has now normalised as I had a delinquent account which seems to have now disappeared from my credit report. My experian score was 480 and it has now gone up to 834.

My barclaycard, which I've had for over 5 years now (started at £150 limit, now at £8,500), is utilised at about 95% (not good, I know) and the APR on that is 29%.

Most of the money was spent on living expenses after I graduated as there was a period of time where I was unemployed. I'm now in full time employment, making a decent living and keeping my expenses as low as possible to try and save money and build up my credit rating.

Even though I've mostly been paying in the minimum monthly instalments towards my barclaycard (between £200-250 p/m), all my payments have always been made on time and there's never been any problems. This was confirmed today when I spoke with barclaycard support who said that my account looks healthy (other than the high utilisation percentage of course).

Recently somebody advised me to look into applying for a new credit card with an interest-free balance transfer (and preferably lower % APR if I'm eligible). It would make my life so much easier if I can transfer like £5,000 to a new card and get a break from interest for a while.

I looked at MBNA because they have an eligibility checker which doesn't run a hard check. I tried with the "0% for up to 32 months with 0.64% handling fee" - the system said I'm not eligible but recommended me to apply for "0% for up to 18 months with 3.49% handling fee".

Now here's the other thing - I also have in my savings account around £3,000. Pending some advice on this, I could put 1 or 2 thousand of that money towards clearing a part of my barclaycard balance, and then applying for a new credit card after. I'm just trying to find out if that would improve my chance of getting accepted for a balance transfer (and a decent deal).

Could someone please advise on the likelihood of me being accepted for an interest-free credit transfer taking into account the information I've shared about my financial situation? Should I apply now or pay some money into my barclaycard first to bring my balance down? Which providers tend to give the best deals with lesser requirements for high credit score etc?

Any advice on this would be hugely appreciated and I would be happy to pay some money to receive guidance with this from someone with more experience than me. Banks seem quite reluctant to provide any specific advice on this due to their policies.

Other information that might be relevant:
Salary: 30,000 - 35,000 depending on bonus
Employed as a junior project manager
Private tenant

Many thanks for reading through my long message!

BoingBoingBaggies

You shouldn't need to pay anyone for a little bit of light financial advice, that is what this website/forum is for!

Initially i would suggest using some of your savings to clear the high interest credit card. It is very unlikely that the savings will be earning you more interest then you are paying on your credit card. However i always like to have a bit of savings for emergencies. But thats just me. Whatever savings you feel you can do without, i would clear off your credit card.

What % chance of acceptance did this website give you on the soft search for your balance transfer? If it is 90%+ then i don't see why you shouldn't give it a go to transfer the debt.

When you apply to MBNA, i'm not sure whether MBNA would 'see' the chunk you have paid off with your savings straight away, or you would need to wait for your credit file to update. This can take a month. Maybe someone could clarify that?

But i would have thought that having a smaller balance on your Barclaycard would improve your credit report and would give you better affordability for credit with other lenders.