Credit card debt

Help1234

Hello,

I recently bought a house and have been doing a lot of renovating, which has ended up costing more than we anticipated. We have finished renovating now and are left with £5,000 credit card debt. I'm only now about to start paying this off but it's going to be a slow process (estimate it taking a year). I'm currently getting charged £50 per month interest.
Should I keep this debt on my card or would I be better transferring it somewhere else/taking a loan etc? Something with less interest rates. Never been in debt before so I am a little clueless!

The_Analyst

Unless you have a 0% interest card, it will probably take forever to pay off as you will get charged interest on your outstanding balance each month. You would be far better taking a loan and paying off the card

Brookside88

get a 0% balance transfer credit card, not a loan

Help1234

Thank you. I am looking at the Santander - 27 months 0%, no fee balance transfer card. However it says "So-so chance - 60% approval rate for this card".

Brookside88

Go with one that your most likely to be accepted for, even if it's a shorter offer, it'll still save you a huge amount of interest

That's what I'd do

Help1234

Thank you. This one is 100% chance: Capital One - 6 months 0%, 3% fee, 34.9%
REP APR. I am confused though with how this works. Do I transfer my £5000 to this card, and then pay it off each month and for 6 months will not be charged any interest? What happens at the end of the 6 months?

Thank you.

Brookside88

Exactly. That's a pretty high fee though., is there anything less than that? At the end of the 6 months it just reverts to the standard variable rate.

6 months is pretty short too, you'd just do the same process again once that offer ends

alan_d

Help1234 wrote: »

Thank you. This one is 100% chance: Capital One - 6 months 0%, 3% fee, 34.9%
REP APR. I am confused though with how this works. Do I transfer my £5000 to this card, and then pay it off each month and for 6 months will not be charged any interest? What happens at the end of the 6 months?

You have £5000 to transfer, so the fee would be £150, added on top of the balance.
If after the 6 months you still have say £4000 left, you'd be paying 34.9% APR on that.... If you paid say £200/month the interest would cost £1641 and it would take 2 years 5 months to pay off:
https://www.moneyadviceservice.org.uk/en/tools/credit-card-calculator

You'd be better finding a card with a longer interest-free period and/or a lower APR.

Help1234

It sounds like the first one I posted is better, but only 60% chance of approval. Does anyone know why that might be? I have good credit score. If I get turned down though will that sink my credit score?

Thanks

Brookside88

Virgin and mbna tend to be the best for balance transfers, what's your chances on those?

Help1234

They are both 0% chance. I wonder what this is based on? The only options MSE gave me were the Santander one and then 3 others all 6 months with 3% fee.