BT now or wait until closer to end of current 0% period

PinstripePhantom

Hi, my current 0% interest balance transfer period with Sainsbury's Bank is coming to an end in August 2024 (9 months) currently have a balance of £4345 and I'm unlikely to pay off in full before then. 

Been looking at other balance transfer options but it's a bit dry out there. Have already just opened a Tesco Bank credit card and transferred £1805 from Sainsbury's with 2.75% fee 0% interest until September 2025 (22 months).

Just not sure what to do with the remaining £4345.

Currently have 0% BT offers from my other credit cards but not sure if now is the right time to take advantage of them as I still have 9 months remaining on the Sainsbury's card and transferring now would mean I'd pay more for the BT fee (albeit not a lot as by my projections of what I can afford to pay off monthly I'll still have a balance of £3220 in August - at 3.8% fee that's £165~ in fees now Vs £122~ if the same deal was available to me come August) but also worried that closer to the time there won't be any offers, trying to find the sweet spot for when to take a deal.


Currently have an offer on my Barclaycard 0% until May 2025 (18 months) 3.8% fee, transfer by end of november - I have enough credit limit to transfer the whole balance but minimum payment would be slightly higher than what I budget for repaying CC debt but I could make ends meet.

Also have an offer for from my HSBC credit card but for a shorter period and I don't have enough credit limit available on there atm so not worth it right now.

What would you do, transfer now or wait and hope offer comes up again closer to August?

MrFrugalFever

There is always a risk when trying to shift debt around on 0%, which is why the most frequent advice seen on here is to ensure that the debt is repaid in full before the end of the 0% promotional period.

If the last couple of years are anything to go by i'd say you are fairly likely to see multiple lenders offering varying 0% BT deals, I don't think the market has ever NOT offered promotional deals, however, the key thing here is not what is available on the market but whether you will be accepted for them.

If you plan on making a big credit application, such as mortgage or substantial unsecured loan then additional multiple credit lines taken out nearer the time of 0% balance ending could hamper your chances. Equally so could a consistent balance on your credit cards.

There's no definitive answer to your question, however, if it were me, I would start thinking about shifting my debt in May/June of next year but also have a plan in place if I cannot do so or the offers are limited in terms of time (say 9-12 months of 0% only).

Good luck.

Brie

It's a bit like playing chicken as you want to wait as long as possible to get the full advantage of the 0% period before you pay out for fees for a BT.  Chances are that if you don't take the Barclaycard offer in Nov they will offer you something again in a couple of months.  But no guarantees of course.  Obviously they want to get you to pay them fees and hope you'll end up paying them lots of interest as well as it will depend on how good a risk you are to them and if you are feeling lucky.

PinstripePhantom

Thank you. I have a follow up question that I've been thinking about in regards to credit limits. When I first started acquiring credit cards I would be given large credit limits but subsequent credit credit cards have given me lower credit limits meaning often not having enough limit to transfer balances in full. Guessing (but could be a number of any other reasons) this is because lenders see I have higher credit limits elsewhere and are reluctant to offer me more.

Do you think closing one of the accounts now or reducing my credit limit would increase the chance of a higher credit limit being offered come summer time when I'm looking for and if I get accepted for new balance transfer card or would be detrimental? I know no one probably knows what lenders are actually thinking and that it could also increase my total credit utilisation but looking for others thoughts in what they would do.

Current credit limits:
Sainsbury's Bank: £12,000 (£4345 balance which I'd be looking to shift so can't close but could reduce limit)

Barclaycard: £11,800 (£1048 balance which is getting paid off this month, use this card for larger purchases which I pay off within the statement date, could close or reduce limite but might be a bad idea in case they offer me a 0% BT later down the line as they are right now)

HSBC: £2000 - Could close this as I only use it for some monthly subscriptions and pay off in full but don't know if closing would have any effect as it's a relatively low limit.

Tesco: £1900 - Only just opened this and sit BT to this.

Monzo Flex: £2,000 - Don't know if closing this would have any effect as can't see it on any of the CRA's so probably not reported.

Altior

There is no discernible rhyme or reason to credit limits, or even applications themselves.  Just follow all the t&c would be my suggestion. One related tip being though, set the repayments at a fixed amount above the minimum if you can, as minimum payments have a flag.

Regarding the first question, if you are disciplined, one option is to get a 0% purchases card, for 17 months for example. Process all your regular spending via that card instead of via your current account. Periodically move the surplus now showing in your current account to an easy access account paying strong interest. You should then have built up enough in that account to settle the Sainsbury card when the time comes. It's up to you how far you go with that, obviously you will have a balance to clear in the purchases card at some point, maybe in 2026. 

Zaul22

sarunas95 said:

Do you think closing one of the accounts now or reducing my credit limit would increase the chance of a higher credit limit being offered come summer time when I'm looking for and if I get accepted for new balance transfer card or would be detrimental? 

When I asked the same question everyone here said no but the reality was yes. My £3500 card got closed, once my report updated with the reduced limit my offers with every other bank went up from £600 to £2200 including banks that said I wasn't eligible at all before. Obviously its still a net decrease in total credit limit but the specific point is the same. 

Brie

Yes I believe the banks will consider all of your credit limits when considering giving you a card or loan.  Don't forget that they will also see any loans, mortgages and credit agreements you might have for car insurance or phone contracts.  Don't know why you can't see your Monzo Flex - maybe if it was opened recently it isn't showing yet?  Or maybe it's the type of report you are looking at that has less detail?

Altior

It's just not a homogenous system, there are so many variables, and all of the providers look at them differently. What one individual experiences will not be exactly replicated by others', as it's all done via algorithm. I get £10K on two different cards, when my available credit across all cards is £100K+. Next I apply for a simple basic Asda card that has no deal other than a £20 bung to do a shop via the card, and get rejected!  

emperormessia

Altior said:

It's just not a homogenous system, there are so many variables, and all of the providers look at them differently. What one individual experiences will not be exactly replicated by others', as it's all done via algorithm. I get £10K on two different cards, when my available credit across all cards is £100K+. Next I apply for a simple basic Asda card that has no deal other than a £20 bung to do a shop via the card, and get rejected!  

Asda card is not basic it about the same tier as a proper bank and Amex

Chrysalis

Its a gamble.  I assumed myself once rates started rising the offers would dry up.  So I upped my payments with a plan to get everything cleared by end of this year (2023) when my existing offers ran out, luckily for me I have done this.  Because as it turns out, for me personally the offers did dry up however also to say, they didnt dry up completely..  I still have some 0% on existing cards, but two of my cards which were offering me 0% reliably for year after year no longer have offers.

So I dont know what to advise, but I will say this, paying the circa 4% fee earlier than you need to is probably a smaller penalty than losing 9 months of 0% assuming your payments are not a big chunk of the debt (which I guess they not from your post).

Barclaycard have been a weird one for me, they will offer me 0% for a few months, then nothing for a year, and this has been the case with them for several years, the only exception is when they massively reduced my credit a few years back I had no offers at all for a couple of years.  But now they one of the few offering me 0%.

If you have multiple cards, making you offers, usually the offers are available until a declared end date, so what you could do is wait until that day, and if there is a new offer on another card then you can wait longer, otherwise maybe that would be the moment.