What savings rate do I need to make money on this money transfer?

7sefton

Hi all

Barclaycard are offering me a money transfer to my current account at 0% for 18 months, with a 2.4% fee.

I’m struggling to work out the savings interest rate I need I earn to make money on this transfer, over 18 months and probably with regular savers.

I’m a higher rate taxpayer.

Can anyone help / share the calculation?

Thanks!

MikeSuzuki

If you were able to secure 4% pa from the moment you received the money until you could pay it back net of the 2.4% they'll demand, you would have a chance of breaking even :j
4% minus 40% income tax leaves you 2.4%.
I got to 4% by multiplying 2.4% by 100/60 (or you could say, checking that 4% works by multiplying it by 0.6, since 0.6 or 60% is what you're left with after higher rate tax).
Good luck in finding 4% with capital safety. I doubt it exists anywhere these days. And you'd need more than 4% to make it worthwhile.
Alternatively, if you had other debt fetching much more than 2.4%, might you borrow at 2.4% and pay down some more-expensive debt?
Mike

PMcCarrol

This is so confusing haha
How does Stoozing work?