Balance Transfer options

1306

I currently have a Vanquis card. Credit limit £1000 and currently sitting at £940 used on it. Paying it off every month via minimum payment direct debit plus extra when I can. due to the high APR nothing really seems to make a dent in the balance. I have been pre-approved for some Capital One cards and wondering if it's worth it to switch and do a balance transfer from Vanquis to a new one. (I'll be honest that I am not good at working out interest rates etc so I am stuck with what to do!)


Capital One Classic Complete Card. 34.9% APR (so not much less than Vanquis 39.9%). 0% balance transfer for 4 months. 3% balance transfer fee


I also have the option of other Capital One cards but they are more credit builder ones (23%APR) and don't have balance transfer option so thinking there's no point considering any of those options.


Is it worth doing to balance transfer or should I just stay where I am and continue paying off Vanquis at the current rate?

foxy-stoat

Take the Capital One card, balance transfer the £940 and over pay what you can until the intro rate runs out, then in a couple of months after apply for a main stream card with a longer BT period. Still overpay what you can. You wont save all that much due to the arrangement fee but it may help obtaining a better card in the future.

Make sure you cancel the Vanquis card and cut the Capital One card up when you receive it.

[Deleted User]

Yes - it's worth doing.

But it sounds as if you are still using the card, as minimum payments plus additional WILL be making a dent in the balance. If it's not, then you need to stop spending.

SnowTiger

1306 wrote: »

I currently have a Vanquis card. Credit limit £1000 and currently sitting at £940 used on it. Paying it off every month via minimum payment direct debit plus extra when I can. due to the high APR nothing really seems to make a dent in the balance. I have been pre-approved for some Capital One cards and wondering if it's worth it to switch and do a balance transfer from Vanquis to a new one. (I'll be honest that I am not good at working out interest rates etc so I am stuck with what to do!)


Capital One Classic Complete Card. 34.9% APR (so not much less than Vanquis 39.9%). 0% balance transfer for 4 months. 3% balance transfer fee


I also have the option of other Capital One cards but they are more credit builder ones (23%APR) and don't have balance transfer option so thinking there's no point considering any of those options.


Is it worth doing to balance transfer or should I just stay where I am and continue paying off Vanquis at the current rate?

It's definitely worth moving the balance.

What you save in interest payments more than makes up for the £28.20 balance transfer fee.

I guess you're paying Vanquis about £50 a month?

The balance transfer fee would push your debt up to £970. If you continue to make payments towards it of £50 a month, your outstanding balance would be £770 after four months.

The calculator here suggests you would have it paid off by April 2020.

If you stayed with Vanquis and paid £50 a month it would take you until December 2020 to clear the debt.

With Capital One's 23%ARP card, and monthly payments of £50, the debt would be cleared by July 2020.

Making over-payments, even if only a fiver here and there, will reduce the debt quicker and you'll end up paying less interest.

If you're still using your Vanquis card you're paying interest on purchases from the moment they hit your account. There's no interest-free period if the card is carrying a balance.

If you transferred your debt on it to a Capital One card you would then be able to take advantage of the interest-free period on the Vanquis card, providing you pay the balance back in full every month.

enthusiasticsaver

It is a shame it is not longer than 4 months but still worth doing given the extremely high interest rate on the Vanquis. You must be paying around £30 interest a month on that. You need to balance transfer to Capital one, stop using the card for additional purchases then try and get the balance as low as possible before Capital one starts charging interest. Close the Vanquis card.

Terry_Towelling

Something else to consider when making minimum payments by DDR (and extra when you can) is that the minimum payment will reduce slightly each month, so the balance doesn't drop as quickly as you'd like.

Far better to try and pay a constant amount each month (a little above the minimum payment). This way, your balance will creep down just a bit quicker - especially during those months when you don't pay any extra off.

I accept this method won't make any difference if you are already putting every spare penny you have into clearing the balance but I suspect there is always just a fraction extra to be found and doing it this way gets you used to how much is going to be taken each month and creates some psychological stability.

PRAISETHESUN

Definitely worth transferring to the 0% card, even if only for 4 months - that will still make a hefty dent into the outstanding balance. After that, the lower rate of interest will also help you pay off the balance faster - best of both worlds. If you can, keep trying to throw every extra penny you have at it and it should start to go down. It'll go down more slowly at the start since the interest is higher, but towards the end the balance will fly right away!

Just keep in mind that pre-approved, doesn't always mean that you will be accepted. But it probably won't really hurt to take that chance at the moment anyway. Just make sure to cut up the old card so you cant spend on it anymore and rack up further debt