0%card to help clear £5000

Newbiecka

I have managed to get a 0% credit card today 9 months £750 limit..
I'm trying to clear a high interest one of £5000 Is using the 750 one going to be worth it to help me clear some of the 5000..
Very new to this but want this credit card bill down I pay £280 ish a month what would be payment on 750?

Please advise x

eskbanker

The minimum monthly repayment on your new card will be specified in the terms - it will obviously reduce your overall interest burden if you have the option of transferring nearly £750 to 0% but not by a huge amount and there will presumably be a balance transfer fee.

Ebe_Scrooge

It'll most likely be worth it - paying zero interest on even a small part of the overall amount is better than paying interest.  There will likely be a fee to factor in, but you can easily work out whether it's worth it if you know the interest rate you're currently paying.

As to what the minimum payment will be, just check the T&C's of the new card - it'll tell you what the minimum payment will be, expressed as a percentage of the balance.

Do make sure you clear the 0% card by the time the promotional offer expires.  Otherwise you'll start paying interest at the card's standard APR, and you'll be back to square one.

That aside, it may be worth looking to see whether you can make some savings elsewhere in order to pay down the high-interest card quicker.  A few months of living like a hermit and cutting out all unnecessary expenditure will pay big dividends in the long term.

Brie

Transferring even part of a balance from a high interest card to a zero % deal may well save you some money.  The crucial things to look at are the fee amount to do the transfer, how long the transfer deal lasts and what specifically is the high interest on the card with the £5k.  Also if you can afford the minimum payment at least on both cards.  

If you pop that info along one of us can do a calculation to see how useful this might be to you.  

Also - have you considered ringing the 0% card provider and asking for an increase?  They might go a bit more if they know they will be making money from it and believe you can afford it.

Finally - whatever you do ensure you have the DDs set up to take at least the minimum every month so you don't lose the deal or incur late payments charges.

Widewheels

I was in a similar position and found that I could only get accepted for lower limits initially but after each successful application I was able to get a higher limit after a few months for another card. So my first one I could transfer £900, a few months later I was accepted with a limit of £3000 and the final one I was accepted for with a limit of £7500, which I didn't need all of. So within a 6 month period I got a large sum on to 0% cards. Just make sure you can pay the amount necessary on each one to pay it off within the promo period.

Newbiecka

Thanks do much for all your helpful advice. I was so scared putting that on here. I will check all details mentioned when I get the letter through..

Newbiecka

Does it make a difference if you just pay your credit card or does it have to be balance transfer???

[Deleted User]

Newbiecka said:

Does it make a difference if you just pay your credit card or does it have to be balance transfer???

How do you mean? If you make a balance transfer, your receiving card pays the sender card just like as if you had paid it off. If you pay off your card from your own money, that is still seen as a credit payment

SuperAllyB

I suspect the OP thinks they can use their new credit card to pay something off of their old credit card as you would with a debit card.

callum9999

Newbiecka said:

Does it make a difference if you just pay your credit card or does it have to be balance transfer???

Yes. If you have 0% on purchases then that's useless to pay off your existing credit (the best you can do is put new spending on it and use the money you would have spent to pay it off). You need a balance (or money) transfer offer.

And I hope you don't take this the wrong way, but you absolutely should not be taking out credit cards without knowing basic information like what the repayments are. This is the kind of reckless behaviour that gets people in financial trouble - though it's a good sign you're putting in the effort to sort it out now!