Transfer balance or keep in the Bank?

I have a credit card which interest free period is due to run out. £4000.
I have an offer on another card for balance transfers for 12 months with a 3% fee.
I have the money in saving account to pay card off which is earning 4.5%, paid monthly.

Do I pay credit card losing interest on savings or transfer balance and pay 3% transfer fee?


  • grumbler
    grumbler Posts: 58,629
    Name Dropper First Post Photogenic First Anniversary
    It's a primary school problem.
    £4K*3% = £120 - the fee if you transfer the balance and leave £4K in the savings account.
    £4K*4.5% = £180 - the interest you'll get on £4K left in the savings account.
    The difference will be slightly smaller because of the minimum payments you have to make to the CC. Also, there can be tax due on your savings interest.

  • grayson
    grayson Posts: 103
    First Post First Anniversary Combo Breaker
    Thanks. I thought that may be the case. 
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