Advice needed

Gethino

Nub wrote: »

^This.


Even with plan 1 student loan I make you £150/month better off - is your tax code right?

Hi! This is deductions for a month.
Salary:£2535.83
Income Tax:£271.80
National Insurance: £222.70
Pension: £218.08
Student Loan:£94
Total Deductions: £806.58
Net pay: £1729.25

Gethino

Just a quick message so I'm 100% with what I'm doing. I'm going ahead with this card now and I'm actually quite excited that I'm doing so. So just to be clear on this: I get paid on the 28th of June so on that date I transfer 95% of my credit allowance from the Virgin Credit Card into my current account with HSBC thus wiping my overdraft and making me £1729.25 in the plus for the first time since god knows when. The £3515 will then be on my Virgin card with a 4% fee for the transaction making the balance on the Virgin card £3655.

I then set up a minimum payment on my Virgin card until I can clear my HSBC credit card. Any ideas how much a minimum payment will roughly be on the Virgin credit card?
On July 28th (pay day the following month) I will transfer £200 to the HSBC credit card making the remaining balance on that card £250.
Unfortunately August is a costly month as it's my summer holiday (10 days in Tenerife) so August will be minimum payment on both HSBC and virgin credit card. On August 28th I will transfer the remaining £250 to clear my HSBC card (September is a quiet month thankfully) whilst continuing to pay the minimum on my Virgin card. On September 28th I will raise the direct debit to £200 on my virgin card. I will continue this until the card is cleared which will take 22 months at £200 a month (March 2019... seems ages away). Any spare money in my current account will go to the card so hopefully it will be cleared before the 22 months. Come to think of it after October I'll have paid the £600 summer holiday so I could make £300 at a push.

Regarding the overdraft then I'll have to be super disciplined in not getting back into it. I'll have to budget each month to the penny. I think I'll reduce my overdraft with HSBC after I do the £3515 transfer from the hefty £3500 to £100 so it stops any temptation. Again, I'll have to be super organised and disciplined but I'm up for the challenge.

Thoughts on this everyone? I think I'm definitely going ahead with it and take my first step to being debt free!!
Does everything I've written seem correct? I haven't missed anything have I?

bobcat2

Looks good to me as long as you stick to the budget. Minimum payment I believe will be 1% of balance so approx £35. I would set this up to be by direct debit as if you miss the payment you will lose your interest free offer.
I can't see the benefit of waiting until pay day to clear the overdraft, unless the fee you are paying on the overdraft is a monthly usage fee. If you are paying daily interest it will just cost you more leaving the overdraft outstanding for longer.
You can still do the full transfer now even if that puts your bank account in credit. Even if the overdraft fee will be charged whatever the 32 months is from account open date so there is no benefit waiting imo.

Gethino

bobcat2 wrote: »

Looks good to me as long as you stick to the budget. Minimum payment I believe will be 1% of balance so approx £35. I would set this up to be by direct debit as if you miss the payment you will lose your interest free offer.
I can't see the benefit of waiting until pay day to clear the overdraft, unless the fee you are paying on the overdraft is a monthly usage fee. If you are paying daily interest it will just cost you more leaving the overdraft outstanding for longer.
You can still do the full transfer now even if that puts your bank account in credit. Even if the overdraft fee will be charged whatever the 32 months is from account open date so there is no benefit waiting imo.

Okay great I'll do the transfer when I'm all set up then. I take it the process of transferring will be quite simple right? All online I imagine? The same to set up a minimum payment hopefully. I'll keep you all updated.

Gethino

Last question, say I make the transfer on June 15th, when will the first minimum payment be due? I will be paying it on pay day. which is 28th so will I need the first minimum payment on June 28th or July 28th?

zippygeorgeandben

Just PMd you Gethino. Finally!

FatVonD

Gethino wrote: »

Oh god have I got the wrong one? This is the one I've got.
32 Months Balance Transfer Credit Card
Balance Transfers: 0% for 32 months (0.60% fee)
Money Transfers: 0% for 32 months (4.00% fee)
Purchases: 0% for 3 months

Regarding my plan in my posts above... does this majorly change things? Do I need to phone them and cancel this and get another one or is it still doable with this one? Advice needed anyone!

That one won't work the way you were planning (is using it to pay for everything) as after the initial three months you will start to pay interest on your purchases.

The money transfer element would be the thing to use, as Bobcat says, transfer £3,500 to your current account and then set up a direct debit for £200 to pay down the card.

Be sure to get HSBC to reduce your overdraft limit once it's cleared to stop you drifting back into it.

CP2016

As everyone else has said, once your overdraft has been cleared by your card log on to your online banking and reduce it to £100 or so, better still, cancel it altogether - you shouldn't need it anyway once you're budgeting properly.

bobcat2

Gethino wrote: »

Last question, say I make the transfer on June 15th, when will the first minimum payment be due? I will be paying it on pay day. which is 28th so will I need the first minimum payment on June 28th or July 28th?

I would assume the payment would be due within 20 days of your statement date and the statement 1 month after account opening date, but it will be stated on your statement. If you make the payment before the statement date the minimum payment on the statement would still be due. Direct debits are good way to make sure you don't miss the payment and the statement will tell you on which day this will be taken, obviously make sure there is sufficient money in your current account to cover the direct debit.

Geoff1963

Instead of the gym, buy three or four B&Q decking squares and a metronome, then step up and down for an hour, or two. You can watch TV at the same time.