Which is the best money transfer option?

mikrt

I've decided to use my card money transfer option of £10,000 to fund a replacement car.

My 2 options are;

0% interest till March 2020 with 5% fee.

3.9% pa interest till November 2021 with o% fee.

Which is the better of the 2?

Thanks in advance.

[Deleted User]

How long do you need to pay it off?

Calculate the interest on the declining balance for the second option and compare it to the one off fee of £500 for the first.

If neither option will clear the balance in the time allocated, you'll need to factor in the costs of future deals.

mikrt

I'm not in any particular hurry to pay it off as rates are so low, but I intend paying £200/m so that'll be 4 years 5 months (including £500 fee).

How much would it work out for same time with 3.9% pa?

foxy-stoat

0% then you need to transfer it to another 0% deal in November 2020 and so on until you have cleared the balance.

What card(s) do you have?

mikrt

It'a an MBNA money transfer into bank account.

In my head the 5% fee and then a card BT in March 2020 did seem the best option, but I was having trouble working out as it shows pa for the alternative, all online calculators are APR and I'm not sure of the difference here.

Thanks

foxy-stoat

Actually it doesnt matter a great deal which way you go - as long as you can guarantee yourself that you can get a BT rate of 0% or 3.9% in 16 months time as if you do the calculations then its within £50 difference over 16 months if you compare the 2 deals.

For me I would pay the 3.9% interest and pay £200 a month for 3 years as its the longest deal - as after 36 months you would of paid £810 ish in interest and be left with about £3600 left to pay. Rather than 16 months of 0% interest for the charge of £500 and the stress that you have to find a BT deal or you will be paying 30% interest.

mikrt

Oh, not a straight forward decision then.

foxy-stoat

You can compare the 2 if you set up your excel or similar spreadsheet:

£10,000.00 * 3.9% / 12 = £32.50 - £200 = £9,832.50 (month 1)
£ 9,832.50 * 3.9% / 12 = £31.96 - £200 = £9,664.46 (month 2)

And so on. Do that for the length of the deal and highlight month 16.

Then do :

£10,000 + 5% = £10,500 - (£200 * 16) = £7,300.00

Add up all the interest rates and see how much you will pay after 16 months (should be about £450)

You can play around with the numbers like paying back £225 or £250 you can see the differences in payback and possible savings.

redux

Are these offers on the same or different cards?

Maybe you could consider mixing the offers, for example £3500 on the short offer and £6500 on the long