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Best way to clear debt

Hi all,

Looking for advice. I have a credit card which used to be 0%, which was no issue when I got it. However, I have since ran into some financial difficulty, leaving me with a debt and large interest payments.

Luckily I am in better financial standing again, so I am able to afford to pay off bigger chunks per month. However, the interest alone is currently at around £95 per month!

As a result of my previous financial difficulties, my credit has taken an unfortunate hit. Currently in the rebuilding process, but I want to clear this card as quickly as possible and suffer as little interest as possible. The current card is an mbna.

I was looking at getting one of these 0% Fluid cards, to transfer some of the balance onto that. I would only transfer as much as I could afford to repay over the 9 months, the remainder for now will have to stay with mbna. I would balance the monthly payments between the two so I could still afford the two payments combined.

Is this a good idea? Is it possible to only transfer a portion of the balance from mbna over to the Fluid? Are there any other downsides/better suggestions?

Thanks!

Comments

  • BoGoF
    BoGoF Posts: 7,098 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Getting any onto 0% APR is always going to be a goos idea. One thing to note is the minimum payment % on the card you are switching to which may be more than the card you are switching from.

    Have you tried the MSE eligibility checker? Is Fluid your only option?
  • Use an eligibility checker to see what cards you might be eligible for.

    Other than that cut back on spending and throw as much as you can at it to clear it
  • Thanks for your quick replies.

    No there were some other options available, all of the 100% guarantee approval were similar, ranging from 6-9 months 0%, 3-4% transfer fee. Fluid comes with the maximum 9 months, and the highest fee. But the higher fee will be offset by the extra months interest free that I can offload from the MBNA card.

    Yes I’ll check the minimum payments on the Fluid thanks for pointing this out.

    Presumably it’s possible to transfer just a certain amount from the MBNA, and not the full balance?

    One more question, would it be possible to take out a new 0% once the balance on the new fluid is cleared, and again transfer a certain amount and continue in this to aid clearing the MBNA? Or would this have a negative effect on my credit (ie taking out a new card and closing accounts every 6-9 months or so)?

    Thanks again!
  • BoGoF
    BoGoF Posts: 7,098 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Yes you can transfer any amount of your MBNA balance, doesn't have to be it all. Usually you can only use 95% of the new cards credit limit for balance transfers.

    At the end of the 9 months you can certainly try and get another 0% card but obviously not guaranteed.
  • Thanks for your reply, good to know. Yes of course it isn’t guaranteed, however do you think two (and possibly more if possible?) credit cards in a short space of time would be a negative factor for my credit rating? Id only ever have one at a time, finishing paying one, close it and open another.
  • From their T&Cs regarding minimum payment:

    -The sum of interest, default fees and 1% of the full amount you owe (including the interest and default fees) as shown on your monthly statement, unless you owe less than £5, then the full amount you owe.
    - If you only make this contractual minimum payment it will take longer and cost more to clear your balance and we may recommend you make extra payments or move all or part of your plan to a PayDown plan and/ or increase your contractual minimum payment.

    So on £1000 credit, the minimum would be £10?
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