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0% balance transfer over 12 months with a 0% fee or 6.9% over 24 months with a 0% fee.

Hello, 

I need some advice - I have a credit card balance I need to transfer - it will make my total balance £2,200. I can either choose to transfer the remaining £901 to my card making the balance £2,200 at 0% with a 4% fee over 12 months or I can choose to pay it off over 24 months with a 6.9% pa but no transfer fee. What is going to be the best option? 

Thanks 

Comments

  • Nasqueron
    Nasqueron Posts: 10,158 Forumite
    Tenth Anniversary 10,000 Posts Photogenic Name Dropper
    edited 2 January 2024 am31 11:19AM
    You need to do the sums on it to work out the best option financially, whether 12 or 24 months is the best for you depends on you

    A £901 balance with 4% fee will be 901 * 1.04 = £937.04 or a £36.04 fee 

    I did a search and couldn't find a very good calculator but one I did find (lemon fool) suggested £901 transferred at 6.4% over 2 years seems would give about £62.87 of interest if the card was cleared over that period paying £41 a month but I wouldn't take that as guaranteed

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  • Mark_d
    Mark_d Posts: 1,945 Forumite
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    The 4% fee hits you regardless of how quickly you pay off the debt.  Personally I'd go for the 6.9%p.a. and be trying to pay off the debt as quickly as possible.
    If it will take you nearly a year to repay the debt then the 4% deal would be cheapest.
  • Brie
    Brie Posts: 13,475 Ambassador
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    What's the rest of the balance on the card you are transferring to?  If it's purchases then you will be hit with a lot of interest going forward.  If it's a previous 0% deal of some sort then none of the money you pay to the card will go on that balance if you take the 6.9% deal and then you have the potential for being hit with a large interest payment when that initial deal ends and you have a balance to pay at your standard cash advance rate.
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  • fergie_
    fergie_ Posts: 249 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    As said above, the 4% charge is regardless of whether you clear the balance or not at all (followed by either another transfer or falling onto their standard rate).

    The 6.9% is obviously more expensive for a year, but would be cheaper if you can clear the balance in 6 months (effectively 3.45%). The main advantage here is you have surety if you need longer than a year to clear the balance, but it is more expensive.
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