0% Balance Transfer Questions Please

ShootingStar_171820

Hi, we have a credit card which has £1,830 still left on it with RBS, we have got it down from £3,000. But we are still paying interest on it which is taking more than half of what we pay for that. We want to do a 0% balance transfer and have looked at the checker on here, the Fluid card has come up, 9 months, 4% one off fee, 34.94% interest, is this a good option?  And how much would the 4% fee be and would this be added to the balance to pay?

And also how do we know what the minimum payments would be? Right now it's £41 and we couldn't afford any more than that, even that is crippling us right now but it's always getting paid, but we're afraid of applying and then finding out the minimum payments are going to be higher. Also is it better to go for a card with less months on it or more? I've never done anything like this before but really want to get this debt gone. On the fluid card it has this written on the general one: "Greater of 1% - 3.25% of balance plus interest, or £5, what does this mean that the minimum repayments would be please as we're lost with it? 

There are other options that have come up on the checker but this one was one of the top ones. 
Thanks for any help. 

Brie

If you apply for a card and have a chance to see what you are actually offered (might be different to 9 months, 4%) then you will be able to decide if you want to go ahead with a balance transfer.

If you did get a new card then what normally happens with a BT is that you move the debt to the new car and they add 4% of that amount to the 0% balance and you start paying that off.  The problem is that if this is just for 9 months then you need to clear everything on that 0% in that 9 month period.  Frankly I don't think it's going to work for you as anything remaining will start accruing interest at 34.94% which is not great.  I would only consider this if RBS is charging you significantly more currently.  

But if you can't afford to pay any more than £41 I wonder if you should be getting another card at all.  Have you called RBS to talk about a repayment plan?  And an interest holiday??  

ShootingStar_171820

We do have options of cards with more months on them than the 9 months. Or I thought that if there was still money left on it near the end of those 9 months that you could just move it again to another 0% card to not pay the interest? Isn't that what 0% cards are there for to move money to so as to not having to pay interest and get more of the payment money going onto the actual debt and not the interest. 

The interest rate on the RBS credit card right now is 18.324% 
We are paying £41 and of that £28.31 is going on interest and not actually paying the debt back. Which is why we were wanting a 0% card to put all that £41 to the debt. 

And this is what it said with the minimum repayments on the general fluid card: 
Greater of 1% - 3.25% of the balance plus interest, or £5, not sure what this means. 

WillPS

You should expect your minimum payment to be 3.25% of your balance + interest. They may offer a lower % of your balance, hence the range.

My main concern would be that if your only option is Fluid currently, which is a sub-prime card (hence the huge APR), what do you do in 9 months, when quite feasibly there would be no options. I would only be considering that card if I knew I could clear the balance in 9 months.

If you have options which offer you longer 0% periods look at them.

ShootingStar_171820

Thank you for your reply. I guess my questions are:

1/ So as the balance of the card has £1,830 still left on it if it was the 3.25% + interest, what would the minimum payments be of that? Maths and figures really aren't my skill area. 

2/So are all 0% credit cards sub-prime ones? 

3/ So the Fluid card isn't good to get? Okay I will look at what other choices we have. 

4/ Going to basics doing the 0% balance transfers. So if we transferred our credit card now to a 0% one, could we then move it again to another 0% one before the time was up before paying the interest on it? 

I will do the checker again in a bit and see what other options we have instead of the Fluid card one. I know that there was other longer options on it we got. 

Brie

1) It depends.  If the balance you transfer is 1830 and you add the 4% fee the balance you need to pay off is 1903.20  (1830+1830x4%=1903.20).  If then you need to pay a minimum 3.25% of the balance plus any interest charged then in the first month that will be  61.85 (1903.20x3.25%) as the interest is zero for 9 months.  This amount will decrease over the following months but in month 10 the interest kicks in.  So while your minimum payment in month 9 will be 47.43 in month 10 it will be 87.  (1412.06x3.25%+1412.06x34.94%/12).  The reference to £5 being paid is when your balance is tiny - maybe the calculated amount is £3 but you'll always pay at least £5.

2) No - lots of excellent cards offer 0% deals, and sometimes they don't.  I almost always have a deal available from MBNA but never from Barclaycard.  

3) Definitely look at the alternatives as Fluid doesn't look possible given your limits to what you can afford to pay.  And also consider that you are likely to have a month when you need to pay both cards.

4) Yes - I do this regularly but ultimately you need to aim to get everything paid off and have a back up plan in case you can't afford to clear the whole amount.  I've been caught a couple of times by this when all the deals suddenly dried up and I wasn't able/willing to apply for an additional card.  

Brie

With some further running of numbers I'm guessing that you currently need to pay 2.25% of the balance.

If you continue to only pay the minimum it will take literally forever to clear the £1830 down to zero - decades and decades.  BUT if you can afford to pay £41 every month rather than a reducing minimum you will clear it in less than 4.  Even a single penny extra will help make a difference.  If you find a fiver on the pavement put it on the card, if you get a spare job or a bonus or a cash birthday present put it on the card.  Sell things! 

I would seriously ring RBS and ask for them to give you an interest holiday as it looks like a BT to a zero card isn't going to be sustainable.  

Additionally if finances are so very tight you might like to go to the debt board and post a statement of accounts outlining all your incoming and outgoings.  People may be able to find ways to get you some breathing space.