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Balance transfer credit card sounds too good to be true?

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Balance transfer credit card sounds too good to be true?

edited 1 June at 4:40PM in Credit Cards
5 replies 192 views
treeroytreeroy Forumite
65 posts
10 Posts
edited 1 June at 4:40PM in Credit Cards
In April 2019 I spent £800 on my credit card (thats my credit limit) on my year's car insurance. I couldn't afford it from my current account because I was in maxed out -£2500 overdraft.
I have been paying the monthly payments on the credit card now for 13 months and yet I still have £500 left on the card to pay off. It feels like its taking forever. I pay £60 a month but the interest is like £25 a month. I haven't been making huge payments because until recently I was trying to get out of my overdraft (i was paying the minimum £20/month, now, i've been paying 60 in the last few months)

I brought my overdraft to £0 at new year thankfully, and now I have £2500 in my current account which i have saved since new year. I know it would be a wise move to just bite the bullet and spend £500 on clearing my credit card, but I am about to buy a new car for around £2500-3000. 

I have read on MSE about these balance transfer cards where for example you get £1000, pay a 2% charge of £20, and you can suddenly clear the existing credit card? Have I actually understood this right because this seems like such a no brainer and too good to be true.

By my rough man maths it's taken me 1 year to clear 3/8 of my credit card so another 1 year to clear the rest - at £20 interest a month thats over £200 in interest alone.

I have spent the last 2 years in significant debt and borrowing more debt in order to pay off debts.. my head says this is not a good idea.

Replies

  • MallyGirlMallyGirl Forumite, Board Guide
    4.9K posts
    Seventh Anniversary 1,000 Posts Name Dropper Intrepid Forum Explorer
    ✭✭✭✭
    If you qualify for one it is a good deal but only those with decent credit history actually qualify for the good deals. Try the eligibility checker to see if you qualify
    I'm a Board Guide on the Debt-free Wannabe, Loans & Credit Cards boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Board guides are not moderators and don't read every post. If you spot an inappropriate or illegal post then please report it to [email protected]
    Any views are mine and not the official line of MoneySavingExpert.com.
  • treeroytreeroy Forumite
    65 posts
    10 Posts
    the eligibility checker returns two offers that are 100% preapproved that have a 1% fee.
  • rosiesposiesrosiesposies Forumite
    154 posts
    Tenth Anniversary 100 Posts Combo Breaker
    If you can get it, and put the funds aside to clear it when the balance transfer offer runs out, then it is a no brainer. remember you have to make the minimum payments each month in order to keep the promotion. 
  • rosiesposiesrosiesposies Forumite
    154 posts
    Tenth Anniversary 100 Posts Combo Breaker
    And make sure you dnt run up any more debt on the existing cards. if you can manage money well, many use this as a way to 0% finance purchases. but you have GOT to plan and put aside the funds somehow, other wise you are just pushing your problems down the track. 
  • penners324penners324 Forumite
    442 posts
    100 Posts Name Dropper First Anniversary
    ✭✭
    Not a good idea to have savings earning 1% interest and debt paying 30% interest.
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