Credit Card Direction

ZeroG82

I'm looking for some thoughts on credits cards. I currently have 3 credit cards, listed below. At the moment I am just paying more than the monthly minimums to reduce them over time. However this is pretty slow going as you can imagine due to added interest and only paying a small amount over the minimum i.e. approx. £40-£50 extra.

I was thinking about maybe seeing about a balance transfer to a new card but I'm not sure if I can guarantee to get one with a big enough limit to accommodate. Can I transfer the balance from 2 cards onto 1 card? or will I have to transfer one balance to a new card and focus on paying that off?

Also since I've paid off Vanquis and no longer want to use it should I close the account or keep it open the the extra credit availability?

Bank of Scotland - Balance £2,486 (24.66%) (Credit limit £5,250)
Capital One - Balance £3,079 (30.34%) (Credit Limit £4,000)
Vanquis - Balance £0 (Credit limit (£1,000) (paid off a few months ago)

CliveOfIndia

You can transfer a balance from any number of cards to a BT card, subject to the credit limit you're offered.  You can usually only transfer up to 90 or 95% of your credit limit.

You can't usually transfer from a card that's part of the same banking group as the BT card.  There's a link in this article that shows you who owns what, or you can just Google it:  https://www.moneysavingexpert.com/credit-cards/balance-transfer-credit-cards/

If the limit you're offered is not enough to transfer all your current debt, then transfer what you can, prioritising the highest-interest debt - you'll still save money in interest payments.

You could potentially look at getting a second BT card if your first application doesn't give you a high enough limit.  But don't go applying willy-nilly, use an eligibility checker first (ideally on the bank's own website rather than a third-party aggregator).  A couple of applications close together is generally OK, more than that and it starts to make lenders get a bit jittery, as it looks like you're desperate for credit.

But do remember that you'll need to clear the BT card by the time the promotional rate expires.  Otherwise any remaining balance will start attracting interest at the card's standard APR, with no guarantee that you'll be able to do another balance transfer.

Mark_d

Closing your Vanquis account sounds like a good idea.  It should increase the credit limit you are likely to get on a new credit card account.

You should make the minimum payment on your accounts with the lower interest rates, and pay as much as you can against your highest rate debt.

Nasqueron

Mark_d said:

Closing your Vanquis account sounds like a good idea.  It should increase the credit limit you are likely to get on a new credit card account.

You should make the minimum payment on your accounts with the lower interest rates, and pay as much as you can against your highest rate debt.

This isn't necessarily true, lenders don't always give higher limits as a new customer just because the old card is closed, they may value the stability of the card and having available, but unused, credit as a good thing as it shows lenders trust you. Regardless, sacking off 1k of credit limit is neither here nor there as it'll take a month or tow to really have any effect and OP could do with the card sooner

ZeroG82

This is what confused me as some people say close any unused credit sources but other people say keep it open.

fergie_

ZeroG82 said:

This is what confused me as some people say close any unused credit sources but other people say keep it open.

It depends on your circumstances. Lenders don't know why the account has closed so can see it as a flag - generally they like consistency. Other lenders may think you are too exposed to debt, but I wouldn't expect £1000 limit to make much odds. Sage advice would be to try the eligibility calculators and soft checks to see what they say before doing anything.

enthusiasticsaver

ZeroG82 said:

I'm looking for some thoughts on credits cards. I currently have 3 credit cards, listed below. At the moment I am just paying more than the monthly minimums to reduce them over time. However this is pretty slow going as you can imagine due to added interest and only paying a small amount over the minimum i.e. approx. £40-£50 extra.

I was thinking about maybe seeing about a balance transfer to a new card but I'm not sure if I can guarantee to get one with a big enough limit to accommodate. Can I transfer the balance from 2 cards onto 1 card? or will I have to transfer one balance to a new card and focus on paying that off?

Also since I've paid off Vanquis and no longer want to use it should I close the account or keep it open the the extra credit availability?

Bank of Scotland - Balance £2,486 (24.66%) (Credit limit £5,250)
Capital One - Balance £3,079 (30.34%) (Credit Limit £4,000)
Vanquis - Balance £0 (Credit limit (£1,000) (paid off a few months ago)

I would leave the Vanquis for now but do a soft eligibility check to see if you can get a 0% BT card to move some of that Capital One as  the interest rate is awful. You probably will not get a high enough limit to move all the credit card debt but something would be a start. Can  you not increase the monthly repayments to the cards? 

ZeroG82

enthusiasticsaver said:

ZeroG82 said:

I'm looking for some thoughts on credits cards. I currently have 3 credit cards, listed below. At the moment I am just paying more than the monthly minimums to reduce them over time. However this is pretty slow going as you can imagine due to added interest and only paying a small amount over the minimum i.e. approx. £40-£50 extra.

I was thinking about maybe seeing about a balance transfer to a new card but I'm not sure if I can guarantee to get one with a big enough limit to accommodate. Can I transfer the balance from 2 cards onto 1 card? or will I have to transfer one balance to a new card and focus on paying that off?

Also since I've paid off Vanquis and no longer want to use it should I close the account or keep it open the the extra credit availability?

Bank of Scotland - Balance £2,486 (24.66%) (Credit limit £5,250)
Capital One - Balance £3,079 (30.34%) (Credit Limit £4,000)
Vanquis - Balance £0 (Credit limit (£1,000) (paid off a few months ago)

I would leave the Vanquis for now but do a soft eligibility check to see if you can get a 0% BT card to move some of that Capital One as  the interest rate is awful. You probably will not get a high enough limit to move all the credit card debt but something would be a start. Can  you not increase the monthly repayments to the cards? 

Things are a bit up in the air at the moment. I'm in the process of selling my house (5 year fixed ends on June 30th). The fixed interest rate was 2.05% and I don't really want to take out another fixed at the moment (due to then having to pay 1.5% to get out of it when the house sells), which would be around 5.5% I think (Just seen on the BBC that Natwest are putting their rates up in May) so if the house doesn't sell by then I'd be on an 8.24% standard rate which will add a fair bit to my monthly payments.

I also have some other stuff I'm paying off at the moment so I'd struggle to increase CC payments for now. Come December however I have some things that will be fully paid off so could then redirect that money and double my CC payments to get it down faster.

My idea with a balance transfer was to stop paying so much interest and use that towards increasing the card payments too.

eskbanker

ZeroG82 said:

Things are a bit up in the air at the moment. I'm in the process of selling my house (5 year fixed ends on June 30th). The fixed interest rate was 2.05% and I don't really want to take out another fixed at the moment (due to then having to pay 1.5% to get out of it when the house sells), which would be around 5.5% I think (Just seen on the BBC that Natwest are putting their rates up in May) so if the house doesn't sell by then I'd be on an 8.24% standard rate which will add a fair bit to my monthly payments.

I also have some other stuff I'm paying off at the moment so I'd struggle to increase CC payments for now. Come December however I have some things that will be fully paid off so could then redirect that money and double my CC payments to get it down faster.

My idea with a balance transfer was to stop paying so much interest and use that towards increasing the card payments too.

If you're selling your house, are you intending to buy again?  If you're planning to take out a new mortgage then it might be worth discussing your finances with one or more mortgage brokers, to gain some insight into how your CC and other debts are likely to be perceived and how best to manage the situation?

ZeroG82

I'm not looking to buy straight away as due to current debts and outlays it makes getting any sort of decent mortgage not very tenable. I'm luckily able to move back into my parents house for a bit, hopefully for not long, in order to be able to save money and pay off things quicker and save for a bigger deposit to get somewhere I want to be.

ZeroG82

I've had a look at BT cards using the MSE eligibility checker and there are various options there. I seem to have a 100% pre-approval for the following:-

Barclaycard 0% interest for 12 months with no transfer fee.
Barclaycard 0% interest for 20 months with a 1.99% transfer fee.

There are longer periods of interest free from Lloyds Bank, Halifax HSBC, MBNA etc but they all seem to be at 3.49% transfer fee. I didn't see Barclaycard listed on the table of banking groups and also it seems the credit limit is only confirmed upon applying.