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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?
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
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Comments
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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 guaranteedSam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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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.0
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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.I’m a Forum Ambassador and I support the Forum Team on Debt Free Wannabe and Old Style Money Saving boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
"Never retract, never explain, never apologise; get things done and let them howl.” Nellie McClung0 -
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.0
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