Is this a good idea and am I missing something?

TriggerHappy

Hi,
I am a problem gambler and although I had been able to keep it under control and sort out all of my finances and repay my debts I recently had a lapse as I started to mix with the wrong sort of people and ignored my triggers...
As a result of this I am now in £4k of debt with Nationwide which was only costing me £16 per month but will now after the changes made to their overdraft charging structure mean I will be paying close to £100 per month more.
I also have a small debt on a Marbles credit card although I only use this for food shopping and repay it each month in full.
As my credit file is improving, I have been offered a Barclaycard with a £4.5k limit. Here is my question...
Barclaycard will allow me to transfer £1.5k of cash at 0% interest for 25 months and £4.5k of credit card debt at the same rate - there will be a charge but it will be a one off and will be included in the 0% deal...

Is it worth me withdrawing cash from my Marbles card to pay into my overdraft and then move the Marbles balance to Barclaycard rather than paying the interest rate on the remaining £2.5k with Nationwide?

The charge for Marbles £100 cash is £2.99, so £2.99 x 25 = £75 and the charge to transfer from Marbles to Barclaycard is about the same with £1k costing £27 so £2.5k = £68...

That's £143 in total.

I won't have the Nationwide overdraft repaid by chipping away at it until about August/September of next year, at this point I estimate I will have paid close to £400 in charges - so in my head the numbers stack up and the £257(ish)* in charges avoided would be used to repay my Barclaycard debt down faster.

*I say 'ish' as I know I'll incur some interest on the cash balanch of my Marbles card for the few days it's awaiting a transfer to Barclaycard.

Am I missing anything? Is there anything which I have not considered?

I do not want to go down the debt charity route as I did this while getting my habit in order, I don't need to do this as I know I can repay this debt without concern - I just want to do it as cheaply and smartly as possible...

Thanks in advance for your replies

Jami74

Have you had a look at the MBNA money transfer card? If eligible and accepted it might be easier and cheaper and better for your credit file than multiple cash withdrawals from Marbles.

Have you actually been approved for the Barclay Card? I only ask because I've had emails in the past offering me financial products only to be declined or offered something different on application.

TriggerHappy

Hi,

Thanks for your reply

So what I've been doing recently (barring my gambling binge) was being very good with everything and using the expensive Marbles card to build my credit file back up to the point where I can start to get more mainstream products.

I looked into MBNA and it said I have 0% chance but a 70% chance of the Barclaycard so applied and boom! £4.5k credit limit (which is actually more than quadruple the £1k which I said I was looking for) and this amount was completely unexpected.

I was going to reduce it to £1k as I don't need that much but then started to think that I could save a couple hundred quid...

What I'm unsure of is if this is a good plan, or if those cash advances (followed by clearing the debt) is going to be more damaging than just putting up with the couple hundred I'd pay extra?

Jami74

TriggerHappy wrote: »

What I'm unsure of is if this is a good plan, or if those cash advances (followed by clearing the debt) is going to be more damaging than just putting up with the couple hundred I'd pay extra?

From what I've read here, cash advances are very damaging to credit files.

How much would it save in Nationwide interest if the overdraft was reduced by £1.5k? You'd need to factor in the Barclay Card fee for transferring the balance, pay at least the minimum monthly payment (as well as still paying towards the overdraft) and have a plan to pay off the rest before the 25 months were up.

Don't forget that if you usually pay (for example) £100 a month off the overdraft but now need to also pay (for example) £25 a month to the credit card you'll then be paying less towards the overdraft each month. And you've got the added risk of having access to that money if you have another lapse.

The potential £257(ish) saving you talk about, works out at about £26 a month for the next ten months that you think it will take you to pay off the overdraft. I've found when trying to do finicky things like this to save money that it's never been quite as simple as it seems it should be and there's a risk that the savings don't end up being savings. Personally I'd probably keep plugging away at the overdraft.

Hopefully more experienced and wiser people than me will chip in with their opinions and advice. But meanwhile, have you been over to the debt-free wannabe board and done an SOA? Maybe there are places you can save an extra few quid to throw at it.

Ben8282

Can you clarify please. You have a Barclaycard with a £4.5k limit. but they will allow only a £1.5k money transfer but will allow a £4.5k balance transfer. Is that correct because looking at the Barlaycard website I can't actually find a card with a current 0% money transfer offer for new customers at all.
What are the respective fees and for what periods are the 0% offers?
What is the credit limit on the Marbles card?

born_again

While Nationwide are increasing interest rates on overdrafts. Do they have a max amount they charge a month?
Some banks have advised that there is a max charge a month for these. Might be worth contacting Nationwide about this.

Tallaght

Were you gambling online or in bookie shops ?

TriggerHappy

Hi Jami,

Thanks for your reply. I think there is a saving to be made but it's not huge amounts and that's why I'm more concerned about any negative effects of the cash withdrawals really...
The cautious side of me is telling me to just grin and bear the overdraft charges but the crafty side is telling me to follow this plan I've 'devised'.

Regardless of all that, thanks again for your reply buddy

TriggerHappy

Hi Ben,

Thanks for your reply.

I applied looking for a £1k balance with 0% on balance transfers and new purchases and was accepted for £4.5k and when I registered online there is a section with deals available and I have two options of balance transfers available (one which is 0% for 25 months and the other is 6.7% for however long it takes to clear the balance I transfer).

A separate deal says I can do a money transfer up to £1.5k at 0% for 25 months - it's there, it's a button which says '1 deal' and when I click it, that's the offer available...

The transfer charge for both shows as 2.7% (it actually says £1027 for £1000).

The credit limit on the Marbles card is £1.7k due to increases which they kept applying but the balance is never above about £50 at any time and the interest rate is 29.9%.

Cheers.

TriggerHappy

Hi BA,

Thanks for your reply, that's actually a very good point...

Apparently not!

I like Nationwide so don't plan to move but there is no way on Earth that I'm keeping my overdraft if they're going to potentially charge me £1k+ for the same product...

TriggerHappy

Hiya,

It was in a bookies and a landbased casino.

I'm self excluded from everything online and everywhere in the city I live but we'd travel for nights out and wound up at the end of the night throwing money away...

They all know I have a problem, but they have their own problems but don't seem willing to accept it. I should never have started to go out with them

I was in control to begin with but after a while just started to lose it up until the point where I had to step away.