using balance transfer credit card to shift debt from x2 purchase credit card-direct debit question 3 March 2022 at 5:39PM in Stoozing: free cash from credit cards 3 replies 92 views

moneysavinggirl40

I have minimum payment direct debits set up on my current account for paying my x2 purchase credit cards every month. Now that I am doing a balance transfer with both these cards, what happens to the direct debits set to pay purchase credit cards? Do I need to cancel them or Do they automatically cancel when the balance transfer occurs to the new card?

Ebe_Scrooge

If you do a BT, meaning that the balance on the 2 credit cards is now zero, you don't need to do anything.  The Direct Debit will still be active, but since the minimum payment required will be zero, then nothing will be taken.

You can cancel the DD (once you're sure the balance is zero), or you can just leave it in case you want to spend on the cards again in the future.  Just be aware - if a Direct Debit is not used for 13 months, the bank will cancel it anyway.  So if you spend on those cards again in 13 months' time, you'll probably find the DD has been deactivated - so you'll need to set it up again.

Hopefully it goes without saying - but please do make sure you've got plans in place to pay off the transferred balance by the time the promotional rate ends.  Otherwise, any remaining balance will start to attract interest at the card's standard APR, and there's absolutely no guarantee you'll be able to do another BT.

As a slight aside - only paying the minimum on an ordinary interest-bearing card (as opposed to a promotional rate) is never a good idea.  It costs you a lot, and doesn't look good on your credit history.  It's eminently sensible to set up a DD to pay the minimum, then pay the remainder every month manually if that's the way you want to do it (paying less than the minimum is VERY bad).  Far better to use a DD to pay the full amount every month.  But if you're only ever paying the minimum, it would be prudent to take stock of your income and outgoings.

moneysavinggirl40

Ebe_Scrooge said:

If you do a BT, meaning that the balance on the 2 credit cards is now zero, you don't need to do anything.  The Direct Debit will still be active, but since the minimum payment required will be zero, then nothing will be taken.

You can cancel the DD (once you're sure the balance is zero), or you can just leave it in case you want to spend on the cards again in the future.  Just be aware - if a Direct Debit is not used for 13 months, the bank will cancel it anyway.  So if you spend on those cards again in 13 months' time, you'll probably find the DD has been deactivated - so you'll need to set it up again.

Hopefully it goes without saying - but please do make sure you've got plans in place to pay off the transferred balance by the time the promotional rate ends.  Otherwise, any remaining balance will start to attract interest at the card's standard APR, and there's absolutely no guarantee you'll be able to do another BT.

As a slight aside - only paying the minimum on an ordinary interest-bearing card (as opposed to a promotional rate) is never a good idea.  It costs you a lot, and doesn't look good on your credit history.  It's eminently sensible to set up a DD to pay the minimum, then pay the remainder every month manually if that's the way you want to do it (paying less than the minimum is VERY bad).  Far better to use a DD to pay the full amount every month.  But if you're only ever paying the minimum, it would be prudent to take stock of your income and outgoings.

A very thorough reply, many thanks. The new balance transfer (BT) card is 0% for 21 months. I aim to do what I do for the 0%purchase credit card, pay by direct debit (the minimum) till month prior to 0% end date, then pay all of it off, (however this time I decided to do a BT.) I won't use this card for any purchases.

[Deleted User]

So long as you have money allocated for this in some untouchable account, that is fine, but paying just the minimum on the assumption you will have the money at the end is dangerous if you don't have emergency funds etc. I can manage money fine but I still pay my BT cards off every month such that they will be cleared at the end e.g. £1200 transfer over 12 months, pay £100 a month as it's peace of mind that they are cleared in time