0% for 12 months (5% fee) or 4.9% for 36 months (no fee) - which is better?

CatGuy

My mum has two balance transfer offers - 0% for 12 months (5% fee) or 4.9% for 36 months (no fee)

At first glance, I'm tempted to say that the 36 month deal is better, but will she end up paying more by the end? Will the monthly payments be higher? I searched for a calculator but couldn't find one. 

MalMonroe

How large is the sum she's wanting to transfer? 

I don't think either of those offers are very good, tbh and if I were her I'd be tempted to try paying off as much as I could afford on the card I already had. If she can clear the balance within 12 months, that'd be great. 

If she did accept the 36 month one she would of course have the option of paying it off sooner. The payments should be lower but there's that interest. . . and it's three years. . . 

Is there any possibility that she may be able to find a better offer than those two?  They just don't tempt me. 

Ebe_Scrooge

CatGuy said:

My mum has two balance transfer offers - 0% for 12 months (5% fee) or 4.9% for 36 months (no fee)

At first glance, I'm tempted to say that the 36 month deal is better, but will she end up paying more by the end? Will the monthly payments be higher? I searched for a calculator but couldn't find one. 

If you search for "loan repayment calculator" you'll find plenty online (yes, I know it's a credit card, not a loan, but it's the same difference in this scenario).

Taking a balance of £1000 as an example, the first one would incur a fee of £50, meaning total repayable is £1050.  The second one gives a total repayable of £1075.61.  Though that does assume she lets it run its full 36 month course - pay it off earlier and she'll save on interest.

Also, this assumes that she'll be able to clear the balance by the end of (whichever she chooses) promotion period.  Never assume you'll be able to transfer any remaining balance to another card.  If you find you can't do another transfer, you'll start paying interest on the remaining balance at the lender's standard APR.

pecunianonolet

Would agree, if there is any opportunity to get approved and debt is not too large I would try Sainsbury or Santander zero fee, zero interest balance transfer cards. Santander allows an eligibility check on their site (soft search) and Sainsbury you can do a soft search on the MSE page. 

I got both yesterday Santander 21 months and Sainsbury 14 months. Will use both for stoozing so a bit of a different use but would give it a go before signing up to any of the above offers, which in one way or another cost extra.

CatGuy

Thanks for the replies. My mum's a pensioner so I don't think there's much chance of her being accepted for a new card. 

Special thanks to @Ebe_Scrooge for the loan calculator tip - it was exactly what I needed 

Ebe_Scrooge

CatGuy said:

Thanks for the replies. My mum's a pensioner so I don't think there's much chance of her being accepted for a new card. 

Special thanks to @Ebe_Scrooge for the loan calculator tip - it was exactly what I needed 

Do remember that when the lenders run their eligibility checks, two (amongst many) of the important factors they take into account are income and current debt.  "Income" can be anything - salary, benefits, pension - as long as it's a regular income.  So being a pensioner needn't - in itself - mean you can't get a new card

Reddleman79

Ebe_Scrooge said:

So being a pensioner needn't - in itself - mean you can't get a new card

As a pensioner, my bank (NatWest) will not give me a credit card despite having banked with then several years. When I did an eligibility check online, only one provider (Capital One) was interested so I'm with them.

Cien

Reddleman79 said:

Ebe_Scrooge said:

So being a pensioner needn't - in itself - mean you can't get a new card

As a pensioner, my bank (NatWest) will not give me a credit card despite having banked with then several years. When I did an eligibility check online, only one provider (Capital One) was interested so I'm with them.

Thats not you as a pensioner Thats you as an individual. 
I've completed loans for pensioners for several thousands, it's based on income and affordability mostly. Some of it will be credit history, and the remaining part will be internal account scoring. 
Every lender will have its own hidden internal scoring that criteria need to be met. 
Assumptions like this needs to stop because this could really prevent someone reaching out for help and the negativity causing them to bury their head in the sand or ignore it.