Is it worth doing a balance transfer?

rosiedee

I've got an outstanding balance of £3600 with MBNA at 4.99% until June 2024, I currently pay £100 fixed. I could do a balance transfer for the full amount at 0% with a fee of 2.9% until January 2024, is it worth doing? I've tried using a credit card calculator but can't figure it out! Any advice would be appreciated.

eskbanker

A one-off 2.9% is cheaper than 4.99% annually if the term is more than about seven months, but when do you anticipate being able to repay the debt completely?  If you BT and bump up your monthly repayment to £150 that would pretty much clear it by the end of the promo period, but if there's still anything owing after January 2024 then the BT option (assuming you couldn't get another at that stage) starts incurring higher interest than you'd be paying on the other option, so projected full repayment is a factor you need to include in your evaluation....