0% money & balance transfers of difference lengths.

Widewheels

Hi,

So I have successfully applied for a new credit card with 0% on balance transfers for 33 months. I've transferred £5000 from another card, which I will be able to pay off within the 33 months.
They also offer 0% money transfers but for only 12 months. I would like to do a money transfer of £1500, which I would be able to pay off within the 12 months, although I know it doesn't work like this.
If I set my monthly repayment at £275 (which is what it would be to pay those off individually within each time period) after 12 months I will have paid off £3300 leaving £3200 total debt left.
Now I am out of the promo period for the money transfer, but with 21 months left of the balance transfer promo period, how much of the remaining balance will I be paying interest on?
I read that repayments will go to the highest debt first so does that mean that I will have paid the whole of the £3300 to the balance transfer, leaving £1700 interest free and £1500 from the money transfer on normal interest rate now?
Or will the £3300 I repay in the first 12 months be split between paying off both transfers as a percent of each sum?

Sorry if this sounds like a maths exam question!

TIA

Carrot007

Widewheels said:

I read that repayments will go to the highest debt first

Highest costing debt, not highest value.

So that would be.

Anything incurring interest (with the highest interest rate going first even if that was only for £20 vs £30000 at 3%).

0% stuff in order of expiry.

So yes you will be fine and the MT would pay off first.

(Assuming using a decent company that has a decent system, I would not put it past newday or similar to completely mess it up and blame their systems, but you would have noticed after teh first payment right?).

Widewheels

Ah that's good to know, thanks!

The card is with MBNA so I assume they should have a decent system.

Cheers.

Ebe_Scrooge

Carrot007 said:

Widewheels said:

I read that repayments will go to the highest debt first

0% stuff in order of expiry.

It's worth checking the T&Cs.  Some cards will prioritise payments to the 0% deal that ends first, some will prioritise that which started first.  This may actually be the same thing in practice, but it's worth checking.

OP, is there a reason you're wanting to do the MT as well as the BT?  If you're going to use it to pay off higher-rate debts then great.  But I'd caution against taking it "just because it's available, some extra cash would probably be handy" :-)

Widewheels

OP, is there a reason you're wanting to do the MT as well as the BT?  If you're going to use it to pay off higher-rate debts then great.  But I'd caution against taking it "just because it's available, some extra cash would probably be handy" :-)

It's not an absolute necessity but would be for something that would be very useful to me, I would see it as an interest free loan and as I say, can make the monthly payments for it to pay it within the promo period. It wouldn't just be beer money

[Deleted User]

Carrot007 said:

Widewheels said:

I read that repayments will go to the highest debt first

Highest costing debt, not highest value.

So that would be.

Anything incurring interest (with the highest interest rate going first even if that was only for £20 vs £30000 at 3%).

0% stuff in order of expiry.

So yes you will be fine and the MT would pay off first.

(Assuming using a decent company that has a decent system, I would not put it past newday or similar to completely mess it up and blame their systems, but you would have noticed after teh first payment right?).

I have a BT card with NatWest and they were allocating payments to the transfer that ended in June fine, I did a second transfer on a new offer that ended in September, and they started putting payments on that one. Had I not noticed and bumped up the payments, I'd have been paying interest on the first balance. I complained and they did offer to extend the 0% at the end. I'm sure there is another one like Capital One who allocate payments based on date of transfer 

Ebe_Scrooge

Widewheels said:

OP, is there a reason you're wanting to do the MT as well as the BT?  If you're going to use it to pay off higher-rate debts then great.  But I'd caution against taking it "just because it's available, some extra cash would probably be handy" :-)

It's not an absolute necessity but would be for something that would be very useful to me, I would see it as an interest free loan and as I say, can make the monthly payments for it to pay it within the promo period. It wouldn't just be beer money

That's fair enough.  Just bear in mind that there will more than likely be a transfer fee, so you'll need to factor that in (meaning it's not a completely free loan).  But as long as you're aware of that, and if it still makes financial sense for your needs, then no problem.

MalMonroe

Widewheels said:

OP, is there a reason you're wanting to do the MT as well as the BT?  If you're going to use it to pay off higher-rate debts then great.  But I'd caution against taking it "just because it's available, some extra cash would probably be handy" :-)

It's not an absolute necessity but would be for something that would be very useful to me, I would see it as an interest free loan and as I say, can make the monthly payments for it to pay it within the promo period. It wouldn't just be beer money

Hi, I recognise your comment here from the days when I thought I was 'flush' with money but turns out I was only flush because I had debts. 

If you look at the forum board, you will see what it says about loans -

"Remember MSE's stance on loans: 'borrow as little as possible, repay as quickly as possible'."

It has served me well and I now (after having survived a DRO and all that entails) exercise extreme caution and do not take out any loans or credit cards for anything I really do not need. You may think (as I did) that you are in total control of your spending and debt but take it from me, life can through you curve balls and you end up in trouble. My advice, now, is always wait until you can really afford it. Taking out a loan that is not absolutely necessary is sheer folly. Lecture ends . . .