Is a money transfer credit card a/the best option for me?

frostj9

Hello, 
my girlfriend and I are definitely inexperienced when managing are money and we have just moved into our first home.

 I have £1900 debt on an old Santander student account which I’m now paying interest on.

my girlfriend has £3000 debt on PayPal credit which she is also playing interest on.

what is the best way for us to consolidate or debt and pay it of interest free? Would it be a money transfer credit card to pay it all off and start paying this off on that interest free for 12 months then use balance transfers after this period? 

Thanks

CliveOfIndia

A Money Transfer card is certainly an option - subject to you being accepted for one, of course.  Bear in mind there's usually a fee for doing the transfer, so you'd need to factor that into your calculations as to whether it will save you money overall.

frostj9 said:

then use balance transfers after this period?

If you can transfer any remaining balance to another card then that's great.  But it's unwise to just assume you'll be able to do another BT.  Hopefully you will be able to, but if you find you can't get accepted for a BT card for whatever reason, you're then lumbered with paying interest on the remaining (original MT) balance at the card's standard APR.  It's much safer to plan to clear the card in full by the time the promotional offer expires.

One other thing to bear in mind.  If you put both debts onto one card, the account holder for that card becomes solely liable for the debt.  Hopefully it would never be an issue - but if you and your girlfriend did part company, the card-holder (whichever one of you it is) has sole responsibility for the debt.

Finally, do remember that it's no good transferring the debt elsewhere then running up fresh debt on Paypal credit or whatever.  Otherwise you'll simply end up with twice the debt you've currently got.  For sure, transferring it to a lower rate of interest will give you some breathing space and allow more of your repayments to hammer down the capital, rather than going towards interest.  But ultimately you're only moving the debt elsewhere - in and of itself, a transfer does nothing to address the actual debt.

Nasqueron

With the option of future BTs, I would recommend you both get a basic credit card e.g. from Capital One or Vanquis, spend monthly on it e.g. the shopping, fuel then setup a direct debit to pay it off in full every month, this will build you both a good credit history over the coming months and years. Make sure you pay the MT card off quickly - most are 12 months so you would be best to do the debt/12 and pay that if you can - 6-12 months isn't enough time to really build a good history up particularly as you both have interest bearing debt which is impacting your file.

Also note that an MT card might not be enough for the debt you have so you have to judge it
Also note that a CC is not joint debt - whoever takes it out is responsible for all the debt on the MT card