Balance Transfer Help!

Gandalf644

JJA83 said:

Gandalf644 said:

JJA83 said:

Card A (HSBC) has £7k limit with £4k debt - apr 23.9 - 9 months 0% bal transfer - current int £20pm
Card B (MBNA) has £4k limit with £2k debt - apr 24.66 - 12 months 0% bal transfer current int £20pm
Card C (Virgin) has £4k limit with £2k debt  - apr 26.49 - 12 months 0% bal transfer - current int £41pm

Are any of the debts already on the cards from a BT, thus at 0% currently or from spending and thus attracting interest currently?

Yes, Card A & B.

 £1500 on card A and £1500 on Card B. Both promotional rates set to end June and APR is at the APR shown above.

Got myself into a bit of a pickle with it all and just want to try and level it out so appreciate any help. 

Sorry, but you aren’t making this very easy for those wanting to help.

Forgetting about BT rates/end dates and what payments you make for the moment.

 Is this currently correct:

You have:

 

Card A HSBC: Credit Limit £7K. Debt on card £4K of which £1500 is promotional rate ending June 2024 with remainder currently attracting 23.9% APR? Total balance will attract interest from June 2024?

 

Card B MBNA: Credit Limit £4K. Debt on card £2K of which £1500 is promotional rate ending June 2024. Remainder attracting 24.66% interest?  Total Balance will attract interest from June 2024?

 

Card C (Virgin): £4K limit. Debt on card £2K attracting interest of 26.49% currently.

 

All 3 cards have Balance Transfer offers ending in 9 (months Card A) or 12 months (Cards B&C)?

I appreciate it does get confusing, particularly if you have been spending on cards primarily designed as balance transfer cards due to the potential mix of promo offers and interest rates, but a clear picture is needed of what you currently owe on what cards and at what interest rates now and from June.

As an aside, have you carried out any eligibility checks to see if you can transfer as much as possible from these 3 cards to a new Balance Transfer card? Do not spend on this card though, it would be for Balance Transfer purposes only!

JJA83

HI Gandalf. 

I'm sorry - this is why I've said I'm in a bit of a pickle and do appreciate it's confusing. 

Yes correct on what you have said. 

I've looked at a BT card but only £400 limit available. 

Gandalf644

JJA83 said:

HI Gandalf. 

I'm sorry - this is why I've said I'm in a bit of a pickle and do appreciate it's confusing. 

Yes correct on what you have said. 

I've looked at a BT card but only £400 limit available. 

Okay.

It is quite awkward this one, due to the mix of paying interrest on the cards, expiring promotions and various BT offers.

To be honest, if you cannot clear the cards, we are somewhat venturing into 'Debt Free Wannabe' forum territory. Yes, I apprecaite that may sound scary, but the folks there are very knowledgeable and helpful.

https://forums.moneysavingexpert.com/categories/debt-free-wannabe

Without borrowing any money, could you be in a position to clear Card C (as this has the highest interest rate)? 

Or at least BT the full balance of Card C to Card A (lowest interest rate - but still a horrible interest rate to be paying on the non-BT portion).

You could then look to BT card B to Card C to take advantage of the 0% offer. However, you need a plan to pay off the full BT part before the BT offer ends.

However, I am assuming that you put no further spending on any of the cards. Is this plan affordable/achievable? 

If not, you are litterally just kicking the can  very slightly down the road for 9 months whilst still paying high interest on Card A and Card B without solving the overall problem which is actually your overall debt and its interest. 

JJA83

Hi Gandalf644

I'm not spending anything on all three cards and I'm currently paying £100 off each. 

I know I cant clear the full balances in 12 months but my target is to clear 1 of the smaller amounts (£2k). It's not ideal but I'd rather pay 1 interest rate than all three - does that make sense?

Gandalf644

JJA83 said:

Hi Gandalf644

I'm not spending anything on all three cards and I'm currently paying £100 off each. 

I know I cant clear the full balances in 12 months but my target is to clear 1 of the smaller amounts (£2k). It's not ideal but I'd rather pay 1 interest rate than all three - does that make sense?

In a way, yes it makes sense.

However, if you BT C to A and then B to C, you are still paying interest from June on the current (non BT) balances on two cards. Conventional wisdom is to throw the maximum money at the card with the highest interest rate and pay the minimum on the card with the lowest interest rate (called snowballing I believe). 

When the card with the highest interest has been 'snowballed' (ie paid off) turn to paying off the maximum possible  on next highest interest card.

This saves you money over the course, but it will take time (potentially over 5 years on card A and that is without interest added on).

 But as I posted upthread, we are verging on Debt Free Wanabe territory here.

Good luck anyway.

 

Brie

So why is interest being charged on Card C?  

Tempted to suggest that £2k debt on Card B gets BTd to Card A.  And then £3k BTd from A to B.  Then £2k from C to A.   And then £1k from A to C.  That should mean that there is no interest bearing accounts on any of the cards.  But also because they have deals that you want to let run you can NOT use them for purchases at all.  

Ensure that Cards B & C have DDs set up that are just above the minimum required.  Set the DD for Card A higher than the minimum DD required perhaps in proportion to ensure it is completely paid off in 9 months.  Then switch the extra money you have to paying off the other 2.  Card C should have the lowest balance of the 2 so clear that one first and then you might have another BT pop up to finish off Card B.

And set yourself a proper budget so you don't have debts and need BTs to get you out of trouble.  It's a hard lesson to learn but it is possible (only taken me about 25 years....)