Barclaycard money transfer offer

dbaner1

Hi,

I have an outstanding balance of about 4k on my barclaycard which I've been slowly paying off. However I've just received a barclaycard offer of a 0% money transfer (until May 2024, 2.6% fee). Is there anything to stop me from applying for a 4k money transfer and then immediately using this cash to pay off the existed balance on the card?

Would this reduce the interest on my account balance for the next year making it easier to pay off. Or would they just pay off the money transfer loan first, leaving me 2.6% down?

Thanks

MrFrugalFever

It would turn your entire balance in to an interest free balance because of the allocation of payments, you will need to ensure you make the full statement payment which may be greater than your MT, for example;

You had a balance of £4,100 on your last statement and MT £4k, you'll need to pay the £4k back plus the £100, i'd also attempt to pay the 'fee' too just to be watertight.

MrFrugalFever

Sorry, forgot to say that obviously you will need to have a credit limit high enough to account for a double balance (£8k).

Ebe_Scrooge

As above, really.  Any payments you make to a card are always allocated to the highest-interest debt first.  So, given the very sound caveats mentioned by the previous poster, in principle it would work thus:

You have a current balance of £4000 that's charging interest.

You do a MT for £4000, meaning you now how £4000 in the bank and £8000 on the card - £4000 of which is at 0% interest, and £4000 of which is at 39% or whatever.

You make a payment for £4000 from the money you've now got in the bank - this will get allocated to the balance that's attracting interest.

You now have £4000 on the card at 0%.  You must make at least the minimum payment each month, and you must clear the outstanding balance by the time the promotional deal expires (never assume that you'll be able to transfer any remaining balance to another card).

And yes, please remember to account for the fee in your calculations as the previous poster mentioned.