Which debt to get rid and how much do I need to Pay

avfc82

Hi,

I have two credit cards that I want to pay off asap

Cooperative Bank - £7400 at 9.9% Apr

MBNA - £9022.77
Which
£1079.83 is set at 25.9% Apr
and
£7942.94 is set at 0% till 14th February 2020


Which one should I tackle first? Or should I see if I could get another balance transfer to another card etc..

Thanks

Willing2Learn

If it was me, I would apply for another BT card. Do the transfer(s) and then focus on paying down the card with the shortest promotion / highest APR.

avfc82

do you not think i should get rid of the 25.9% and then see if I can get balance transfer after that, as both cards will be 0% then

Just_Di

avfc82 wrote: »

I have two credit cards that I want to pay off asap

A couple of quick questions

Have you missed any monthly contractual payments on these two credit cards?

Why do you want to clear off the balance asap?

I'm assuming it's to get a better APR but it would be useful to see if there's another reason.

Di

Dobbibill

The 25.9% portion of the MBNA is the obvious first choice.

How much can you pay off it each month?
When the 0% portion ends, what rate does it revert to?
Have you applied for other cards with BT offers?

avfc82

Just_Di wrote: »

A couple of quick questions

Have you missed any monthly contractual payments on these two credit cards?

Why do you want to clear off the balance asap?

I'm assuming it's to get a better APR but it would be useful to see if there's another reason.

Di

Hi,

No I have never missed a payment.

Just don't want to be in debt anymore and want to clear it.

I'm not sure if I will get a 0% APR Credit Card balance transfer elsewhere as I only have a Fair credit rating, only reason I got one with MBNA as I have been with them for a while and they could see that I would pay more than minimum amount each month and never missed any payments.

avfc82

Dobbibill wrote: »

The 25.9% portion of the MBNA is the obvious first choice.

How much can you pay off it each month?
When the 0% portion ends, what rate does it revert to?
Have you applied for other cards with BT offers?

About £1k to 1.2K per month I could pay off each month.

I think that it goes to 29.9% APR when the 0% promotion finishes.

No I haven't applied for any other cards, I did a balance transfer from my BarclayCard to MBNA back in June 2018.

Dobbibill

avfc82 wrote: »

About £1k to 1.2K per month I could pay off each month.

I think that it goes to 29.9% APR when the 0% promotion finishes.

No I haven't applied for any other cards, I did a balance transfer from my BarclayCard to MBNA back in June 2018.

1st thing to do is to hit the 25.9% portion - that will be done in 1-2 months.


Log into your Barclaycard - they are normally generous with existing customer offers - see if there's a BT offer for you.


If there is - move the 9.9% balance (or as much as possible Credit Limit allowing)
If there isn't/or isn't enough limit - use the eligibility checker to see what other cards may be available and do an application with them.


From next month throw money at either the highest rate (9.9% if you can't move it) or the earliest ending promo date.

You've got a fair amount to be throwing at your debt which is good news - all the best with your debt busting.

redux

If you truly can pay £1k to £1k2 towards these (look at your income and expenditure, and decide if this is a bit hopeful or realistic), then it should be relatively easy to pay off both by Feb 20, but that also depends on further spending.

If you hit the interest bearing part of MBNA straight away then concentrate on the Co-op, paying this £7400 off in a year would cost about £400 interest, or making it in 6 months would cost £215.

This means that any balance transfer deal now that has a transfer fee of say 3% would hardly be worth doing for the full £7400, only to pay some of it off in the first couple of months anyway, unless it's to be cautious about the overall timing. If you can find an offer now with zero or low transfer fee and for 2 to 3 years, then fine, but if there's a fee consider doing £2000 to £5000 transfer depending on cashflow forecast.

For instance, taking about 3% and 6 months I mentioned above as a rough break even point, if you decide £700 monthly towards the Co-op is more realistic after all, then maybe transfer about half the balance. If £1200 or fairly close a month is indeed feasible, it's barely worth bothering with a fee bearing transfer now.

Don't worry too much about what I'm saying on this point though. Finessing £20 or £50 difference of fee or interest is small beer against the overall total. Most important is to be in a good position in Feb 2020, with Co-op done and MBNA either fully paid off or a new balance transfer offer to cover the remainder.