Confusion with a %0 balance transfer from Virgin to Barclaycard

cymruchris

Different cards from different providers (and sometimes even the same providers) will have different fees/charges/benefits/minimum payments. As you say it's too late now as it's all done and dusted, and although it'll be tough, it hopefully will mean you get the balance paid down quicker (which really should always be the goal). I've just taken a money transfer offer with virgin so that I could stick the funds into a savings account for the promotional period, and I was surprised that the minimum payment was so low - I think most cards tend to be higher, as you've now experienced. Good luck in getting the debt down!

Growingold

The amount of the 3.75% min payment will decrease each month as each monthly payment is made. 

What I personally  do so I can keep track of payments better is after the first payment to look at the balance left, make an extra payment to round it down to the nearest £5 or £10 then set up a fixed monthly payment which I know would cover the minimum payment so that way I'm overpaying by a little which will bring the balance down even quicker

I realise this isn't for everybody as some people can only afford the minimum but this method works for me especially as I have more than one card to keep track of.  Obviously it could be a different fixed payment on each as the % of min payment differs from card to card.  

[Deleted User]

Wonka_2 said:

Woodstock2020 said:

Hi Ozzig. Assume so. Trying to find my Virgin rates.
Thing that's confusing me is that I'll have paid off the Barclaycard in a approx. 2 years if I'm paying £288 a month. Which could be seen as an upside, but I don't have £288 spare a month. I had assumed I'd be paying a similar amount to Virgin per month.

Oh dear - and there's now the potential that if you transfer back you may not get the same low level of 'minimum payment' - 1% is very low and wouldn't cover the interest on £7.4k on most interest bearing cards

Presumably you have a contingency if £288pm is unaffordable ?

I believe that, with Virgin, the minimum payment is the interest PLUS 1% of the remaining balance. 

zagfles

There is a way round this with BC. But you need to understand it and it involves discipline and a bit of effort.

Assuming you have spare credit limit on the BC, pref around £600, use the card for your day to day spending and spend at least the min payment every month, so around £300. Then when you get your statement, pay off the exact amount of your spending (or make sure you pay min payment if you've not managed to reach it with spending). 

You can pay it manually, or by direct debit by setting a "fixed amount" for the payment which you adjust every month shortly after the statement to amount you've spent in that statement period.

That way, you pay no interest, and you maintain the balance transfer at the full amount for the full term. Obviously, only spend on stuff you were going to spend on anyway eg supermarket shopping, petrol etc, don't spend for the sake of it just to reach the target! But I guess most people will spend £300 a month on a card for day to day living expenses.

Watch out for the credit limit, remember to account for nearly 2 month's worth of spending.

Altior

I seem to recall Barclaycard being in the news a couple of years ago for increasing minimum payments for  customers their systems flagged up as being in 'persistent debt'. So it is actually variable with them. 

The OP should actually set the regular payment at just above the minimum, if possible. 

surreysaver

zagfles said:

There is a way round this with BC. But you need to understand it and it involves discipline and a bit of effort.

Assuming you have spare credit limit on the BC, pref around £600, use the card for your day to day spending and spend at least the min payment every month, so around £300. Then when you get your statement, pay off the exact amount of your spending (or make sure you pay min payment if you've not managed to reach it with spending). 

You can pay it manually, or by direct debit by setting a "fixed amount" for the payment which you adjust every month shortly after the statement to amount you've spent in that statement period.

That way, you pay no interest, and you maintain the balance transfer at the full amount for the full term. Obviously, only spend on stuff you were going to spend on anyway eg supermarket shopping, petrol etc, don't spend for the sake of it just to reach the target! But I guess most people will spend £300 a month on a card for day to day living expenses.

Watch out for the credit limit, remember to account for nearly 2 month's worth of spending.

Barclaycard do adjust the direct debit if you make additional payments (assuming you've made the additional payments in plenty of time for them to do the adjustment)

zagfles

surreysaver said:

zagfles said:

There is a way round this with BC. But you need to understand it and it involves discipline and a bit of effort.

Assuming you have spare credit limit on the BC, pref around £600, use the card for your day to day spending and spend at least the min payment every month, so around £300. Then when you get your statement, pay off the exact amount of your spending (or make sure you pay min payment if you've not managed to reach it with spending). 

You can pay it manually, or by direct debit by setting a "fixed amount" for the payment which you adjust every month shortly after the statement to amount you've spent in that statement period.

That way, you pay no interest, and you maintain the balance transfer at the full amount for the full term. Obviously, only spend on stuff you were going to spend on anyway eg supermarket shopping, petrol etc, don't spend for the sake of it just to reach the target! But I guess most people will spend £300 a month on a card for day to day living expenses.

Watch out for the credit limit, remember to account for nearly 2 month's worth of spending.

Barclaycard do adjust the direct debit if you make additional payments (assuming you've made the additional payments in plenty of time for them to do the adjustment)

My suggestion was to either use manual payments or use a DD. Not both. With a DD you can have a "fixed" payment which you can change every month to your spending (or the min payment if more).

They should really have an option for a DD of "balance excluding promotional balances (or min payment if more)", but they don't, would probably make it too easy!